The document provides examples and explanations of revaluation accounts. A revaluation account is prepared when assets or liabilities are revalued at the time of business reorganization. The examples show journal entries to record adjustments such as an increase in the value of buildings, a decrease in stock valuation, unrecorded expenses, and changes to provisions. The final example summarizes all adjustments in a revaluation account, showing decreases to some accounts, increases to others, and the transfer of the net gain to partners' capital accounts in their old profit sharing ratios.

1. REVALUATION ACCOUNT-2
Class : XII
Subject : Accountancy
Ms. GEETA HANDA
Geeta Handa

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PGT Accountancy
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geet7handa@gmail.com Geeta Handa

3. Particulars Rs. Particulars Rs.
Revaluation AccountDr. Cr.
Geeta Handa

4. Particulars Rs. Particulars Rs.
To Asset A/c --------- By Assets A/c --------
To Liabilities A/c -------- By Liabilities A/c ---------
To Unrecorded Liabilities A/c -------- By Unrecorded Asset A/c -------
To Provision For Doubt Debts -------- By Provision For Doubt Debts --------
To Gain (Profit) transferred to
Partners’ Capital / Current A/c
( Balance Amount ) ---------
By Loss transferred to Partners ‘
Capital/ Current A/c
( Balance Amount ) ----------
Revaluation AccountDr. Cr.
Geeta Handa
* Note : Current A/c in case of Fixed Capitals

5. Particulars Rs. Particulars Rs.
To Asset A/c --------- By Assets A/c --------
To Liabilities A/c -------- By Liabilities A/c ---------
To Unrecorded Liabilities A/c -------- By Unrecorded Asset A/c -------
To Provision For Doubt Debts -------- By Provision For Doubt Debts --------
To Gain (Profit) transferred to
Partners’ Capital / Current A/c
( Balance Amount ) ---------
By Loss transferred to Partners ‘
Capital/ Current A/c
( Balance Amount ) ----------
Revaluation AccountDr. Cr.
Geeta Handa
* Note : Current A/c in case of Fixed Capitals

6. Particulars Rs. Particulars Rs.
To Asset A/c --------- By Assets A/c --------
To Liabilities A/c -------- By Liabilities A/c ---------
To Unrecorded Liabilities A/c -------- By Unrecorded Asset A/c -------
To Provision For Doubt Debts -------- By Provision For Doubt Debts --------
To Profit transferred to :
A’s Capital / Current A/c -------
B’s Capital / Current A/c ------- ---------
By Loss transferred to :
A’s Capital / Current A/c -------
B’s Capital / Current A/c ------- ----------
Revaluation AccountDr. Cr.
Geeta Handa
* Note : Always distribute Profit /Loss of Revaluation A/c in Old Partners in Old Ratio

7. Example: 1 Balance Sheet (extract)
Liabilities Rs. Assets Rs.
Stock 50,000
Geeta Handa
Adjustment :
Market Value of Stock is Rs.45,000.
OR
Value of Stock is to be written down by 10%
OR
Value of Stock is to be reduced by Rs.5,000.
OR
Value of Stock is to be reduced to Rs.45,000.
OR
Stock was found Overvalued by Rs.5,000

8. Particulars Rs. Particulars Rs.
To Stock A/c 5,000
Revaluation AccountDr. Cr.
Geeta Handa
Journal Entry
Date Particulars L.F Dr. ( Rs.). Cr. (Rs. )
Revaluation A/c Dr.
To Stock A/c
( Being the Stock revalued)
5,000
5,000

9. Example:2 Balance Sheet (extract)
Liabilities Rs. Assets Rs.
Building 2,00,000
Geeta Handa
Adjustment :
Revised value of Building is Rs.2,40,000.
OR
Building is to be appreciated by 20%
OR
Value of Building is to be raised by Rs.40,000.
OR
Building is to be increased to Rs.2,40,000.
OR
Building was found undervalued by Rs.40,000

10. Particulars Rs. Particulars Rs.
By Building A/c 40,000
Revaluation AccountDr. Cr.
Geeta Handa
Journal Entry
Date Particulars L.F Dr. ( Rs.). Cr. (Rs. )
Building A/c Dr.
To Revaluation A/c
( Being the building revalued)
40,000
40,000

11. Example: 3 Balance Sheet (extract)
Liabilities Rs. Assets Rs.
Creditors 70,000
Geeta Handa
Adjustment :
Creditors are to be paid Rs.1,000 more.
OR
A Creditor of Rs.1,000 not recorded in books to be taken into account.
OR
Creditors were unrecorded to the extent of Rs.1,000.
OR
Unrecorded liability towards Suppliers Rs.1,000.
OR
Creditors reassessed to be paid Rs.71,000.

12. Particulars Rs. Particulars Rs.
To Creditors A/c 1,000
Revaluation AccountDr. Cr.
Geeta Handa
Journal Entry
Date Particulars L.F Dr. ( Rs.). Cr. (Rs. )
Revaluation A/c Dr.
To Creditors A/c
( Being the Creditors reassessed)
1,000
1,000

13. Example: 4 Balance Sheet (extract)
Liabilities Rs. Assets Rs.
Sundry Creditors 30,000
Geeta Handa
Adjustment :
Creditors are to be paid Rs.1,500 less.
OR
An item of Rs.1,500 included in Sundry Creditors is not likely to be Claimed.
OR
A liability of Rs.1,500 included in Sundry Creditors was not likely to arise.
OR
Creditors were written back by Rs.1,500
OR
It is found that the Creditors included a sum of Rs.1,500 which is not to be paid.

14. Particulars Rs. Particulars Rs.
By Creditors A/c 1,500
Revaluation AccountDr. Cr.
Geeta Handa
Journal Entry
Date Particulars L.F Dr. ( Rs.). Cr. (Rs. )
Creditors A/c Dr.
To Revaluation A/c
( Being the Creditors reassessed)
1,500
1,500

15. Example: 5 Unrecorded Liability
Geeta Handa
Adjustment :
Outstanding Expenses amounted to Rs.3,200 .
OR
A liability for Outstanding Expenses of Rs.3,200 is to be created.
OR
Unrecorded liability for Expenses was Rs.3,200.
OR
A bill for Rs.3,200 for Expenses was not accounted.
OR
An outstanding bill for expenses Rs.3,200 will be brought into books.

16. Particulars Rs. Particulars Rs.
To Outstanding Expenses A/c 3,200
Revaluation AccountDr. Cr.
Geeta Handa
Journal Entry
Date Particulars L.F Dr. ( Rs.). Cr. (Rs. )
Revaluation A/c Dr.
To Outstanding Expenses A/c
(Being the outstanding Expenses
recorded)
3,200
3,200

17. Example: 6 Unrecorded Assets
Geeta Handa
Adjustment :
Unrecorded Investments worth Rs.7,000 .
OR
Investments of Rs.7,000 which did not appears in the books should be recorded.
OR
An unrecorded Investment of Rs.7.000 be accounted.
OR
Investments Rs.7,000 not mentioned in the Balance Sheet were to be taken into
account.

18. Particulars Rs. Particulars Rs.
By Investments A/c 7,000
Revaluation AccountDr. Cr.
Geeta Handa
Journal Entry
Date Particulars L.F Dr. ( Rs.). Cr. (Rs. )
Investments A/c Dr.
To Revaluation A/c
( Being the Investments recorded)
7,000
7,000

19. Example:7 Balance Sheet (extract)
Liabilities Rs. Assets Rs.
Debtors 1,00,000
Less: Provision for Doubtful
Debts 7,000 93,000
Geeta Handa
Adjustment :
Provision for Doubtful Debt is to be Rs.10,000.
OR
Provision for Doubtful Debt be increased by Rs.3,000.
OR
Provision for Doubtful Debt be increased to Rs.10,000.
OR
Provision for Doubtful Debt is to be created @ 10 % on debtors.

20. Particulars Rs. Particulars Rs.
To Provision for Doubtful
Debt A/c
3,000
Revaluation AccountDr. Cr.
Geeta Handa
Journal Entry
Date Particulars L.F Dr. ( Rs.). Cr. (Rs. )
Revaluation A/c Dr.
To Provision for Doubtful Debt A/c
(Being Provision for doubtful debt )
3,000
3,000

21. Question M and N are Partners in a firm sharing Profits in the ratio 2 : 1.
At the time of reconstitution of firm Assets and Liabilities were revalued as
follows:
1. Market Value of Stock is Rs.45,000.(Book value of Stock Rs.50,000)
2. Building is to be appreciated by Rs.40,000.
3. Creditors are to be paid Rs.1,000 more.
4. A liability of Rs.1,500 included in Sundry Creditors was not likely to
arise.
5. A liability for Outstanding Expenses of Rs.3,200 is to be created.
6. Unrecorded Investments were valued at Rs.7,000.
7. Provision for Doubtful Debt be increased by Rs.3,000.
Geeta Handa

22. Particulars Rs. Particulars Rs.
To Stock A/c 5,000 By Building A/c 40,000
To Creditors A/c 1,000 By Creditors A/c 1,500
To Outstanding Expenses A/c 3,200 By Investments A/c 7,000
To Provision for Bad Debts A/c 3,000
To Gain transferred to Partners’
Capital A/c (Balance Amount) 36,300
48,500 48,500
Revaluation AccountDr. Cr.
Geeta Handa

23. Particulars Rs. Particulars Rs.
To Stock A/c 5,000 By Building A/c 40,000
To Creditors A/c 1,000 By Creditors A/c 1,500
To Outstanding Expenses A/c 3,200 By Investments A/c 7,000
To Provision for Bad Debts A/c 3,000
To Gain transferred (2 : 1 ) to
M’s Capital A/c 24,200
N’s Capital A/c 12,100 36,300
48,500 48,500
Revaluation AccountDr. Cr.
Geeta Handa

24. Points to be Remember :-
• Debit side for Losses / Credit Side for Profits
• Divide the Profit /Loss of Revaluation in Old Ratio.
Geeta Handa

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