A, B and C carried on partnership sharing profits as 4:3:2. Their balance Sheet on 30.6.2018 was as follows:B Retired on 1.7.2018 and these adjustments were agreed upon before ascertaining the amount payable to B:

1. Provision for Doubtful Debts raised to 5% on debtors;

2. Land and Buildings to be appreciated by 15%;

3. A provision of ₹650 is to be made for outstanding legal charges;

4. Goodwill to be valued at ₹45,000 and B’s share to be adjusted into the Accounts of A and C who decided to continue the business sharing profit as 5:3;

5. Stock to be reduced to ₹32,000;

6. The capital of the new firm to be adjusted in proportion to their new profit-sharing ratio and actual cash to be brought in or paid off by or to the continuing partners, as the case may be B agreed to leave the amount due to him by the firm as loan to the firm carrying interest at 6% p.a. Pass Journal entries and make the Balance Sheet following the retirement of B.

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Creditors Capital - A Capital B Capital C Liabilities ₹ 41,400 Cash in hand 87,800 Cash at bank 66,000 Debtors 43,800 2,39,000 Assets Less: Provision for doubtful debts Stock Plant and Machinery Land and Buildings 25,000 500 ₹ 500 21,000 24,500 36,000 37,000 1,20,000 2,39.000