| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
| Trade Creditors | 30,000 | Cash in Hand | 15,000 |
| Bills Payable | 45,000 | Cash at Bank | 75,000 |
| Expenses Owing | 45,000 | Debtors | 1,50,000 |
| General Reserve | 1,35,000 | Stock | 1,20,000 |
| Capital A/c : | Factory Premises | 2,25,000 | |
| X – 1,50,000 | Machinery | 80,000 | |
| Y– 1,50,000 | Loose Tools | 40,000 | |
| Z – 1,50,000 | 4,50,000 | ||
| 7,05,000 | 7,05,000 |
The terms were:
(a) Goodwill of the firm was valued at Rs. 1,35,000 and adjustment in this respect was to be made in the continuing Partners’ Capital Accounts without raising Goodwill Account.
(b) Expenses Owing to be brought down to Rs. 37,500.
(c) Machinery and Loose Tools are to be valued @ 10% less than their book value.
(d) Factory Premises are to be revalued at Rs. 2,43,000.
Show Revaluation Account, Partners’ Capital Accounts and prepare the Balance Sheet of the firm after the retirement of Y.
SOLUTION
