Question

As on above date of the balance sheet, partners decided to change profit-loss sharing ratio te
1:1:1. On this date they decided to revalue the assets and liabilities for which information is as under
(1)
The value of land is to be increased upto * 2,50,000 and building value is to be
increased by 50,000.
(2) The value of machinery is to be decreased upto * 80,000.
(3) The value of investments is to be reduced 30 %.
Provision for bad debt reserve at 20 % and discount reserve of 5 % is to be made
debtors.
(5) The stock value of 15,000 is to be reduced by 20 %.
(6) An amount of 20,000 is not to be paid to creditors.
(7) 3000 for outstanding expenses and 2000 for income receivable are not recorde
the books.
Form the above information, write journal entries in the books of the partnership firm and
prepare the revaluation account.
Momir prabha and Meng are the manners of merchin fir Their G. She​

Answer 1

ANSWER

Journal entries:

1. Revaluation A/c Dr. 15000

To Stock A/c 15000

(Being Value of stock to be reduced to Rs. 1,25,000)

2. Revaluation A/c Dr. 25000

To machinery A/c 25000

(Being Value of machinery to be decreased by 10%)

3. Land and Building A/c Dr. 62000

To Revaluation A/c 62000

(Being Value of machinery to be decreased by 10%)

4. Revaluation A/c Dr. 4000

To Provision for Doubtful Debts A/c 4000

(Being Provision for Doubtful Debts is created @ 5% on debtors)

5. Revaluation A/c Dr. 10000

To Akash's capital A/c 10000

(Being remuneration for carry out reconstruction paid)

6. Revaluation A/c Dr. 8000

To Ashish's capital A/c 2666

To Aakash's capital A/c 2666

To Amit's capital A/c 2668

(Being profit on revaluation is distributed among partners in their old ratio)

7. General Reserver A/c Dr. 90000

To Ashish's capital A/c 2666

To Aakash's capital A/c 2666

To Amit's capital A/c 2668

(Being general reserve is distributed among partners in their old ratio)

10% . 10% . 1,25,00