Question

Thursday enterprise is a partnership firm in which Baqir, Basit and Bazid are partners sharing profits or losses equally.

Each partner's capital was as follows on 31 December 2019:

BaqirRs.80,000

BasitRs.60,000

BazidRs.75,000

Bazid decided to retire on 31 December 2019. He will be paid Rs. 50,000 in cash and will leave the remaining amount as a loan to the continuing partnership of Baqir and Basit.

Goodwill of the partnership was agreed to be Rs.60,000 on 31 December 2019.

After Bazid leave, Baqir and Basit will share profit equally.

According to the accounting policy of partnership goodwill is not reported in financial statements.

Required:

Prepare capital account of each partner on 31 December 2019.