3. X, Y and Z were partners, sharing profits in the ratio of 10:7:3 Liabilities Amount Assets Amount (RO) (RO) 40,000 20,000 20,000 Cash Debtors Creditors General Reserves Capital Y z 80,000 60,000 20,000 30,600 30,000 Less: Provision 70,000 600 60,000 Stock 40,000 Fixed Assets Buildings 220,000 220,000 Z retires on that date subject to the following conditions: a. Fixed assets are to be depreciated by 20% except buildings worth RO 40,000 (book value) which is to be valued at RO 60,000. b. RO 600 to be written off as bad debts and provision for doubtful debts to be done at 4% on debtors. c. That the goodwill of the firm to be valued at RO 32,000 d. Liability for outstanding expenses RO 4,000 to be provided e, Office equipment of RO 8,000 was to be brought into books on the date of retirement f. It was agreed that A and B will share profits equally in future. Pass necessary Journal entries and prepare necessary accounts by transferring O's share of Capital to his loan account