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Question 19 Chapter 4 of +2-Part-1
19. (Revaluation entries) X and Y share profits in 6:7 ratio. The future ratio will be 4:3 from 1st April 2018. They have decided to make a revaluation of assets and liabilities by passing revaluation entries before bringing into force the new ratio.
The following is the position of assets on 1st April 2018 with their revised values
| Book Value | Revised Value | |
| Building | 50,000 | 55,200 |
| Machinery | 25,000 | 22,400 |
| Creditors | 28,000 | 29,300 |
| Stock | 29,000 | 32,900 |
(i) If there is no other information.
Journal
| Date | Particulars |
L.F. | Debit | Credit | |
|---|---|---|---|---|---|
| 2018 | |||||
| Apr. 1 | Building a/c (Rs.55,200-50,000) | Dr. | 5,200 | ||
| Stock a/c (Rs.32,900-29,000) | Dr. | 3,900 | |||
| To Revaluation A/c | 9,100 | ||||
| (Being increase in the value of assets recorded in the books) | 15,000 | ||||
| Revaluation a/c | Dr. | 2,600 | |||
| To Machinery A/c (Rs.25,000-22,400) | 2,600 | ||||
| (Being decrease in the value of assets recorded in the books). | |||||
| Revaluation A/c | Dr. | 1,300 | |||
| To Creditors A/c | 1,300 | ||||
| (Being increase in the amount of liability recorded in the books) | |||||
| Revaluation a/c (Rs.9,100-3,900) | Dr. | 5,200 | |||
| To X’s Capital a/c | 2,400 | ||||
| To Y’s Capital a/c | 2,800 | ||||
| (Being Profit on revaluation a/c transfer to partners capital a/c in O.P.S.R) | |||||
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Economics Educator
Mrs. Dilgeerjot Kaur holds a B.Com and M.Com degree and has over 9 years of teaching experience in microeconomics, macroeconomics, and business economics.
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