Question

Pass entries in the firm’s journal for the following on admission of a partner:
(i) Machinery be depreciated by ₹ 16,000 and Building be appreciated by ₹ 40,000.
(ii) A provision be created for Doubtful Debts @ 5% of Debtors amounting to ₹ 80,000.
(iii) Provision for warranty claims be increased by ₹ 12,000.

Answer 1

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Answer 2

Solution:

                                            Journal  

Sr. No.        Particulars                                     Debit Rs.     Credit Rs.

(i)          Revaluation A/c                    Dr.           16,000

                To Machinery A/c                                                   16,000

(Being value of machinery decreased)

(ii)           Building A/c                         Dr.          40,000

      To Revaluation A/c                                                           40,000

(Being value of building increased)  

(iii)        Revaluation A/c                      Dr.           4,000

      To Provision for doubtful Debts A/c                                 4,000

(Being provision created on debtors)  

(iv)        Revaluation A/c                       Dr.           12,000

To provision for warranty claims A/c                                       12,000

(Being liability recorded)