35. A and B are partners sharing profits in the ratio of 2:1. C is admitted as a new partner and the new
ratio is decided as 5:3:2. The assets and liabilities are revalued as :
i) Building was appreciated by 25% (book value of BuildingRs.4,00,000)
ii) The provision for doubtful debts was reduced from Rs. 5,000 to Rs.3,000
iii) A provision for Rs.4,000 was to be made for an outstanding bill for repairs.
iv) Unrecorded investments were worth Rs.10,000
v) Unrecorded liability toward suppliers was 12,000, pass the necessary journal entries.
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Explanation:
building A/c Dr 1,00,000
provision for
doubtful debts A/c Dr 2000
Investment A/c Dr 10,000
To revaluation A/c 1,12,000
Revaluation A/c Dr 16,000
To outstanding
bill A/c 4000
To unrecorded
liability A/c 12,000
Revaluation A/c Dr 96000
To A capital A/c 64,000
To B capital A/c 32,000
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