Advertisement
Question 23 Chapter 4 of +2-Part-1
Advertisement
Table of Contents
23. (Revaluation by passing a single adjustment entry) P, Q and R are sharing profits and losses in the ratio of 5:3:2. They decided to share future profits and losses in the ratio of 2:3:5 with effect from 1st April,2016. They also decided to record the effect of following revaluations without affecting the book value of assets and liabilities by passing a single adjustment entry:
| Book Value | Revalued Amount | |
| Land & Building | 2,00,000 | 3,00,000 |
| Equipment | 3,00,000 | 2,80,000 |
| Bank Loan | 1,00,000 | 90,000 |
| Outstanding salaries | 90,000 | 1,20,000 |
The solution of Question 23 Chapter 4 of +2 Part-1: –
| Journal | |||||
| Date | Particulars | L.F. | Debit | Credit | |
| R’s Capital a/c | Dr. | 18,000 | |||
| To P’s Capital a/c | 18,000 | ||||
| (Being revaluation of assets and liabilities adjusted through capital accounts) | |||||
Working Notes: –
| Adjustment for revaluation of assets on change in profit sharing ratio: | ||||
| Particular | P | Q | R | |
| As per old ratio 5:3:2 | ||||
| Land & Building | 50,000(Cr.) | 30,000(Cr) | 20,000(Cr) | |
| Equipment | 10,000(Dr.) | 6,000(Dr.) | 4,000(Dr.) | |
| Bank Loan | 5,000(Cr.) | 3,000(Cr.) | 2,000(Cr.) | |
| Outstanding Salaries | 15,000(Cr.) | 9,000(Cr.) | 6,000(Cr.) | |
| Total | 30,000(Cr.) | 18,000(Cr.) | 12,000(Cr.) | |
Advertisement-X
| Adjustment for revaluation of assets on change in profit sharing ratio: | ||||
| Particular | P | Q | R | |
| As per New ratio 2:3:5 | ||||
| Land & Building | 20,000(Cr.) | 30,000(Cr) | 50,000(cr) | |
| Equipment | 4,000(Dr.) | 6,000(Dr.) | 6,000(Dr.) | |
| Bank Loan | 2,000(Cr.) | 3,000(Cr.) | 5,000(Cr.) | |
| Outstanding Salaries | 6,000(Cr.) | 9,000(Cr.) | 15,000(Cr.) | |
| Total | 30,000(Cr.) | 18,000(Cr.) | 12,000(Cr.) | |
| Adjustment | 18,000(Cr.) | 18,000(CD.) | ||
Thanks, Please Like and share with your friends
Comment if you have any questions.
Also, Check out the solved question of previous Chapters: –
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
- Chapter No. 1 – Accounting Not for Profit Organisations
- Chapter No. 2 – Partnership Accounts – I (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
