Partnership Accounts - Revaluation of assets & liabilities, adjustment regarding reserves accumulated profits or losses

1. Ms. K. KALAI SELVI
Assistant Professor of Commerce
PG & Research Department of Commerce
Bon Secours College for Women, Thanjavur

2. Revaluation of Assets & Liabilities
Sum No.21
(Answer for Sum No.21)
Journal Entries
Date Particulars
L.F.
No.
Amount
Dr.
Amount
Cr.
Rs. Ps. Rs. Ps.
30.06.2009
,,
,,
Plant & Machinery A/c Dr.
To Revaluation A/c
(Being P & M revised by 20%)
Revaluation A/c Dr.
To Land & Building A/c
(Being L & B reduced to Rs.20,000)
Revaluation A/c Dr.
To Doubtful Debts A/c
(Being DD increased to Rs.3,000)
4,000
5,000
1,000
00
00
00
4,000
5,000
1,000
00
00
00

3. ,,
,,
Sundry Creditors A/c Dr.
To Revaluation A/c
(Being Sundry Creditors of Rs.2,000 is
not claimed)
Investment A/c Dr.
To Revaluation A/c
(Being investment not included now
brought into account)
Revaluation A/c Dr.
To A’s Capital A/c
To B’s Capital A/c
(Being revaluation profit transferred to
old partners)
2,000
13,000
13,000
00
00
00
2,000
13,000
7,800
5,200
00
00
00
00
Revaluation Account
Date Particulars
Amount
Rs.
Date Particulars
Amount
Rs.
30.06.2009
,,
,,
To Land & Building A/c
To Doubtful Debts A/c
To Profit transferred (3:2)
A’s share 7,800
B’s share 5,200
-------
5,000
1,000
13,000
30.06.2009
,,
,,
By Plant & Machinery A/c
By Sundry Creditors A/c
By Investment A/c
4,000
2,000
13,000
19,000 19,000
A, B & C’s Balance Sheet as on 01.07.2009
Liabilities
Amount
Rs.
Assets
Amount
Rs.
Capital Accounts :
A 50,000
Add: Revaluation Profit 7,800
-----------
B 45,000
Add: Revaluation Profit 5,200
-----------
C
Creditors 25,000
Less : Unclaimed amt. 2,000
------------
57,800
50,200
25,000
23,000
Plant & Machinery 20,000
Add: increase by 20% 4,000
---------
Land & Building 25,000
Less: Revaluation red. 5,000
----------
Furniture
Stock
Debtors 30,000
Less : Provision 2,000
Less : Rev.Provi 1,000
---------
Investment
Cash 26,000
Add: New Partner 25,000
-----------
24,000
20,000
6,000
15,000
27,000
13,000
51,000
1,56,000 1,56,000

4. Sum No.22
Bills Receivable 17,000
Stock 20,000
Investments 20,000
Furniture 5,000
Buildings 37,000
Answer for Sum No.22)
Journal Entries
Date Particulars
L.F.
No.
Amount
Dr.
Amount
Cr.
Rs. Ps. Rs. Ps.
31.03.2009 Revaluation A/c Dr.
To Doubtful Debts A/c
2,500 00
2,500 00

5. ,,
,,
(Being DD increased by Rs.2,500)
Revaluation A/c Dr.
To Furniture A/c
(Being Furniture reduced by Rs.500)
Building A/c Dr.
To Revaluation A/c
(Being Building was agreed to be
valued at Rs.45,000)
Investment A/c Dr.
To A’s Capital A/c
(Being A’s own capital considered as
firm’s investments)
Revaluation A/c Dr.
To Old Employees’ Claim A/c
(Being Old Employees’ Claim was
allowed)
500
8,000
4,300
1,200
00
00
00
00
500
8,000
4,300
1,200
00
00
00
00
Revaluation Account
Date Particulars
Amount
Rs.
Date Particulars
Amount
Rs.
31.03.2009 To Doubtful Debts A/c
To Furniture A/c
To Old Employees’ Claim A/c
To Revaluation Profit
A’s Capital 1,900
B’s Capital 1,900
---------
2,500
500
1,200
3,800
31.03.2009 By Building A/c 8,000
8,000 8,000
A, B & C’s Balance Sheet as on 01.04.2009
Liabilities
Amount
Rs.
Assets
Amount
Rs.
Creditors
Salary Outstanding
A’s Capital 50,000
Add: Rev .Profit 1,900
Add : Amt. for Inv. 4,300
---------
B’s Capital 45,000
Add: Rev .Profit 1,900
---------
40,000
14,000
56,200
46,900
Cash in hand
Cash at Bank
Sundry Debtors 42,000
Less: Prov. for DD 4,000
Less: Rev. DD 2,500
---------
Bills Receivable
Stock
Investments 20,000
2,000
10,000
35,500
17,000
20,000

6. C’s Capital
Old Employers Claim
-
1,200
Add: A’s 4,300
----------
Furniture 5,000
Less : Revaluation 500
--------
Buildings 37,000
Add : Rev. 8,000
--------
24,300
4,500
45,000
1,58,300 1,58,300
Sum No.25
Memorandum Revaluation A/c
Particulars
Amount
Rs.
Particulars
Amount
Rs.
To Stock A/c
To Fixtures A/c
To Provision for DD A/c
To Bills Discount A/c
To A’s Share of Profit 1,200
To B’s Share of Profit 400
-------
2,000
100
800
500
1,600
By Land & Building A/c 5000
5000 5000
To Land & Building A/c 5000 By Stock 2,000

7. By Fixtures
By Provision for DD
By Bills Dis
By Revaluation Loss A/c (3:1:1)
A’s share 960
B’s share 320
C’s share 320
---------
100
800
500
1,600
5,000 5,000
Balance Sheet after admitting partner Cas on 01.04.2009
Liabilities
Amount
Rs.
Assets
Amount
Rs.
Sundry Creditors
Capital Account
A 30,000
B 16,000
C 10,000
------------
-
41,500
56,000
Cash 22,500
Add: C’s Cash 10.000
---------
Bill Receivable
Sundry Debtor
Stock
Land & Building
Fixtures
32,500
3,000
16,000
20,000
25,000
1,000
97,500 97,500

8. Adjustment Regarding Reserves / Accumulated Profits or Losses
Sum No. 27
(Answer for Sum No. 27)
Journal Entries
Date Particulars
L.F.
No.
Amount
Dr.
Amount
Cr.
Rs. Ps. Rs. Ps.
01.01.2009 General Reserve A/c Dr.
Investment Flu. Fund A/c Dr.
To A’s Capital A/c
To B’s Capital A/c
To C’s Capital A/c
(Being accumulated Profit distributed
to the old partners in the ratio of 3:1:1)
40,000
45,000
00
00
42,500
21,250
21,250
00
00
00

9. Sum No. 28
(Answer for Sum No. 28)
Journal Entries
Date Particulars
L.F.
No.
Amount
Dr.
Amount
Cr.
Rs. Ps. Rs. Ps.
01.01.2009 General Reserve A/c Dr.
Investment Flu. Fund A/c Dr.
To X’s Capital A/c
To Y’s Capital A/c
To Z’s Capital A/c
(Being accumulated Profit distributed
to the old partners in the ratio of 4:3:3)
18,500
68,000
00
00
34,600
25,950
25,950
00
00
00