Question

Seenu and Siva are partners sharing profits and losses in the ratio of 5 : 3. In view of Kowsalya admission, they decided

1. To increase the value of building by ₹ 40,000.
2. To bring into record investments at ₹ 10,000, which have not so far been brought into account.
3. To decrease the value of machinery by ₹ 14,000 and furniture by ₹ 12,000.
4. To write off sundry creditors by ₹ 16,000.

Pass journal entries and prepare a revaluation account.

Answer 1

Journal Entries

Date	Particulars	L.F.	Debit ₹	Credit ₹
	Revaluation A/c ..............Dr. To Machinery A/c To Furniture A/c (Loss items entered in the debit side)		26,000 - -	- 14,000 12,000
	Building A/c .............Dr. Investment A/c ...............Dr. Sundry Creditors A/c ..................Dr. To Revaluation A/c (Profit items entered in credit side)		40,000 10,000 16,000 -	- - - 66,000
	Revaluation A/c ............Dr. To Seenu's Capital A/c To Siva's Capital A/c (Profit of revaluation A/c transferred to old partners capital old ratio)		40,000 - -	- 25,000 15,000

 

Dr.		Revaluation Account		Cr.
Particulars		₹	Particulars	₹
To Machinery A/c		14,000	By Building A/c	40,000
To Furniture A/c		12,000	By Investment A/c	10,000
To Seenu's Cap.	25,000		By Sundry Creditors A/c	16,000
To Siva's Cap.	15,000	40,000
		66,000		66,000