Question

U V and W are partners sharing profits in the ration of 2:3:5. They also decide to record the

effect of the following revaluations and reassessments without affecting the book values of assets

and liabilities by passing a single adjustment entry


Book Value (Rs) Revised Value (Rs)

Land and Building 3,00,000 3,50,000

Furniture 1,50,000 1,00,000

Sundry Creditors 60,000 20,000

Outstanding Salaries 10,000 15,000

Answer 1

Explanation:

Revalued Assets and Liabilities =

         50000+40000 - 50000-5000 = 35000

Entry will be,

        Revaluation a/c                     dr      35000

                To U's Capital a/c                                   7000

                To V's Capital a/c                                  10500

                To W's Capital a/c                                 17500