Question

Prepare Revaluation account and Partner's capital account.
0.7 Geeta and Meeta are partners in a firm sharing profits in the ratio of 3:2. Their Balance sheet on 31st March, 2020 was as under:
24,000
Liabilities
Creditors
Bills Payable
General Reserve
Capitals:
Geeta
Meeta
₹
Assets
27,000 Cash
5,000 Debtors
18,000 Less: prov. for bad debts
Stock
Patent
75,000 Building
48,000
4,800
43,200
30,000
7,400
20,400
40,000
35,000
1,25,000
1,25,000
Reeta is admitted into the partnership giving her 1/5th share in the profits.
Reeta is to bring in * 30,000 as her Capital and her share of goodwill in cash, subject to the following terms:
(a) Goodwill of the firm to be valued at * 50,000.
(b) Stock to be reduced by 10% and provision for Bad Debts to be reduced by * 2,400.
(c) Patents are valueless.
(d) There was a claim against the firm for damages amounting to * 2,500. The claim has now been accepted.
(e) A debtor, Ram whose dues $2,000 were written off as Bad Debts last year paid 1,500 in full settlement of accounts.
(1) Expenses on revaluation of assets and reassessment of liabilities amounting to 1,000 were paid by the firm.
Prepare Revaluation Account and Partners Capital Accounts.
*****​

Answer 1

Answer:

Revaluation account is a nominalaccount prepared for the purpose of distributing and transferring the profit or loss arising out of increase or decrease in the book value of assets and/ or liabilities of the partnership firm at the time of Change in profit sharing ratio,admission of a partner, retirement of apartner ..