X, Y and Z were in a firm sharing profit and loss as 3:2:1. Their Balance Sheet on 31 st March, 2024 was as follows: Liabilities Amount (₹) Assets…

(a) (i) Entries for the treatment of goodwill Total goodwill of firm is 60,000 Z’s share (₹ 1/6 x 60,000) = 10,000 (a) X’s Capital A/c Dr.6,000 Y’s Capital A/c Dr.4,000 Z’s Capital A/c Dr.2,000 To Goodwill A/c - 12,000 (Being existing goodwill written off) (b) X’s Capital A/c Dr.6,000 Y’s Capital A/c Dr.4,000 To Z’s Capital A/c - 10,000 (Being Z’s share of goodwill credited to him and debited to gaining partners in gaining ratio) (ii) Revaluation Account Particulars ₹ Particulars ₹ To Patents A/c 6,000 By employee provident fund A/c 6,000 To Machinery A/c 6,000 By Investments A/c 2,600 To Provision for Bad Debts A/c 1,000 To workmen’s compensation* 6,000 By Revaluation Loss Partners’ Capital A/cs – X 5,200 Y - 3,467 Z - 1,733 10,400 19,000 19,000 (iii) Partners’ Capital Account Particulars X (₹) Y (₹) Z (₹) Particulars X (₹) Y (₹) Z (₹) To Goodwill 6,000 4,000 2,000 By Balance b/d 78,000 42,000 31,000 To Revaluation A/c 5,200 3,467 1,733 By Investment Fluctuation Fund 3,000 2,000 1,000 To Investments 27,600 By X’s Capital A/c 6,000 To Z’s Capital A/c 6,000 4,000 By Y’s Capital A/c 4,000 To Bank A/c 5,334 To Z’s Loan A/c 2,667 To Bills Payable A/c 2,666 To Balance c/d 63,800 32,533 81,000 44,000 42,000 81,000 44,000 42,000 (iv) Balance Sheet as on 1 st April, 2024 Liabilities Particulars ₹ Assets Particulars ₹ Capital accounts: Patent 24,000 X 63,800 Machinery 54,000 Y 32,533 96,333 Closing stock 30,650 Z’s loan account 2,666 Sundry debtors 50,000 Trade creditors 31,000 Less: Provision for bad debts (5, 000) 45,000 Bills payable 2,667 Cash and bank balances 3,016 Workman compensation 18,000 Employee Provident Fund 6,000 1,56,666 1,56,666 Working Notes: 1. Gaining ratio of existing partners: X 3/5 -3/6 = 3/30 Y - 2/5 -2/6 = 2/30 *It is assumed that Workmen’s Compensation is treated as liability.