k and s and p are partners sharing profit in the ratio of 3:2:1. pass journal entries of k. (a) value of furniture is to be increased by rs 10000 book value of furniture is rs 50000. (b) value of furniture is to be increased to rs 50000 book value of furniture is 40000. (C) value of furniture is to be brought upto120% of its value book value of furniture is rs 20000. (d) stock is found under valued by rs 4000 book value of stock is rs 25000
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ACCOUNTANCY
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Asked on December 26, 2019 by
Yuraj Kalra
X,Y and Z are partners sharing profit and losses in the ratio of 5:3:2. Z retires, and on the date of his retirement, the following adjustments were agreed upon:
(a) The value of Furniture is to be increased by Rs.12,000.
(b) The value of stock to be decreased by Rs.10,000
(c) Machinery of the book value of Rs.50,000 is to be depreciated by 10%
(d) A Provision for Doubtful Debts @ 5% is to be created on debtors of book value of Rs.40,000.
(e) Unrecorded investment worth Rs.10,000.
(f) An item of Rs.1,000 included in bills payable is not likely to be claimed, hence should be written back.
Pass necessary Journal entries.
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ANSWER
Revaluation Account
r
Cr.
Particulars
Rs.
Particulars
Rs.
To Stock A/c
10,000
By Furniture A/c
12,000
To Machinery A/c
5,000
By Investment A/c
10,000
To Provision for Doubtful Debts A/c
2,000
By Bills Payable A/c
1,000
To Profit transferred to:
X’s Capital A/c
3,000
Y’s Capital A/c
1,800
Z’s Capital A/c
1,200
6,000
23,000
23,000
Journal
Date
Particulars
L.F.
Debit
Credit
(a)
Furniture A/c Dr.
12,000
To Revaluation A/c
12,000
(Being increase in value transferred to Revaluation Account)
(b)
Revaluation A/c Dr.
10,000
To Stock A/c
10,000
(Being decrease in stock transferred to Revaluation)
(c )
Revaluation A/c Dr.
5,000
To Machinery A/c
5,000
(Being decrease in value of machinery transferred to Revaluation Account)
(d)
Revaluation A/c Dr.
2,000
To Provision for Doubtful Debts A/c
2,000
(Being increase in liabilities to Revaluation Account)
(e)
Investment A/c Dr.
10,000
To Revaluation A/c
10,000
(Being increase in value transferred to Revaluation Account)
(f)
Bills Payable A/c Dr.
1,000
To Revaluation A/c
1,000
(Being decrease in liabilities transferred to Revaluation Account)
(g)
Revaluation A/c Dr.
6,000
To X’s Capital A/c
3,000
To Y’s Capital A/c
1,800
To Z’s Capital A/c
1,200
(Being Revaluation profit transferred to Partner’s Capital Account)