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ILLUSTRATION 2:. (Retirement of two partners and continuance of business by third partner) Morning, Day and Night carry on business in partnership sharing the Profits
ILLUSTRATION 2:. (Retirement of two partners and continuance of business by third partner) Morning, Day and Night carry on business in partnership sharing the Profits and Losses in the proportion of 25%, 25% and 50% respectively. Their Balance Sheet as on 31-3-2015 was as under Liabilities $ Assets $ 1,00,000 75,00,000 10,00,000 4,00,000 Sundry Creditors 1,20,000 Cash/Bank General Reserves 80,000 Capitals $ Inventories Morning 24,00,000 Fixed Assets W.D.V. Day 24,00,000 Investment (At cost) (Market Night 50,00,000 Value 15,00,000) 98,00,000 1,00,00,000 10,00,000 1,00,00,000 On 15 April, 2015, Morning and Day retired and Night continued the business. Night paid $36,00.000 to Morning and $36,00,000 to Day in full and final discharge of their claim in the partnership. This amount was brought in by Night for the purpose of payment to the retiring partners. None of the assets and are to be revalued. You are asked to: (i) Pass accounting entries in relation to the above in the books of business. (ii)Prepare Balance Sheet of the business unit after the above transactions are recorded
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