Question

X and Y are partners in a firm sharing profits in the ratio of 3 : 2. They admitted Z as a new partner for 1/4th share. At the time of admission of Z, Stock (Book Value ₹ 1,00,000) is to be reduced by 40% and Furniture (Book Value ₹ 60,000) is to be reduced to 40%. Pass the necessary journal entries.

Answer 1

Answer:

A partnership is an arrangement where parties, known as business partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments or combinations

Answer 2

Solution:

                                                      Journal  

Sr. No.               Particulars                          Debit Rs.             Credit Rs.

(i)                  Revaluation A/c         Dr.          76,000

                           To Stock A/c                                                40,000

                          To Furniture A/c                                           36,000

(Being value of assets decreased)

(ii)                        X's Capital A/c     Dr.           45,600

                         Y's Capital A/c       Dr.           30,400

                                   To Revaluation A/c                               76,000

(Being loss on revaluation transferred to partners capital A/c)