4.X, Y and Z are partners sharing profit in the ratio of 3:2:1. Their balance sheet as on December 31st 2016 is as under: Balance sheet as on December 31st, 2016 Liabilities Amount Assets (RO) (RO) Account Payables 100,000 Loan From Bank 220,000 Business Premises Machinery 200,000 150,000 General reserve 30,000 350,000 Delivery Van 40,000 Capital: Inventory 120,000 X 170,000 Receivables 63.000 Y 125,000 Less Provision for bad debt 3,000 60,000 Z 125,000 420,000 Bank Dhofar 200,000 770,000 770,000 Z retires on that date on the following terms: (a) The Goodwill of the firm is valued at RO 60,000. (b) Inventory and Business Premises to be appreciated by 10%. (c) Machinery is depreciated by 10% (d) Provision for Bad debts is increased up to RO 5,000. Prepare: Partner's Capital account. X Y Z Bank 137500 Balance B/f Balance C/d 207500 150000 Revlauation A/c 207500 150000 137500 x Y 170,000 125,000 125,000 37500 25,000 12500 207500 150000 137500 Z Answer: Capital Accounts Working Note: Revaluation profit Increase in assets Goodwill 60000 Inventory 12000 Premises 20000 92000 Decrease in Assets Machinery (15000) Debtors (2000) (17000) (5000-3000) Profit on revaluation X 3/6 37500 75000 Y 2/6 25000 Z 1/6 12500