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or brought in by P and Q: Total capital of the new firm Rs 125,800, which should be divided in the ratio of 3 2 P and Q ren Q New Capital Rs 75,480 Rs.50,320 Existing capital Rs.51.600 Rs 30,400 Cash brought in Rs.23.880 Rs.19.920 36 MLUSTRATION TRetirement of a Partner X Y and Z were partners sharing profits in the ratio of 3 2 1 BALANCE SHEET as at 31" March 2010 Liabilities Rs. Assets Rs. 32,250 Cash 4,000 A Payable General Reserve Capital Accounts 18.750 Books Debts Less Provision Stock Fixed Assets 35.000 2.500 15.500 32.500 10,000 75,000 Y 2 20,000 15.000 1.21 500 1.21.500 On the same date X retires from the firm and the following adjustments were agreed upon Goodwill of the firm is to be valued at Rs 30,000 and X's share should adjusted the accounts of and 2 without opening the goodwill account Fixed Assets to be written down by 20% Stock be written up by 10% and Provision for Doubtful Debts increased to Rs 4.500 Bills Payable to reduced by Rs 1.000 Y & Z have to bring sufficient cash to pay off X and to leave a cash balance of Rs 1.750 in the firm Capitals of Y and Z have to be re-adjusted in their new profit sharing ratio which is 53 Show Revaluation account Partners Capital Accounts and Balance Sheetal Y and Z