Question :
X, Y and Z are partners in a firm sharing profits arid losses in the ratio of 1: 2: 3. Z retires and his Capital Account after making all adjustments of reserve and gain (profit) on revaluation exists at Rs. 3,60,000. X and Y agreed to pay him Rs. 4,50,000 in full settlement of his claim. X and Y decided to share future profits in the ratio of 1: 3. By what amount X and Y will be debited/credited?
Option 1: X debited Rs 75,000 and Y debited Rs 15,000
Option 2: X credited Rs 75,000 and Y credited Rs 15,000
Option 3: Debiting X by Rs 15,000 and Y debiting Rs 75,000
Option 4: Credited X by Rs 15,000 and Y credited By Rs 75,000
Correct Answer: Debiting X by Rs 15,000 and Y debiting Rs 75,000
Solution : Answer = Debiting X by Rs 15,000 and Y debiting Rs 75,000
In this scenario, after Z's retirement, his Capital Account stands at Rs. 3,60,000. X and Y agree to pay him Rs. 4,50,000. As per the new profit-sharing ratio of 1:3 between X and Y, X will be debited by Rs 15,000, and Y will be debited by Rs 75,000 to settle Z's claim and adjust the new profit-sharing arrangement. Hence, the correct option is 3.
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