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Question 23 Chapter 4 of +2 Part-1 – USHA Publication 12 Class Part – 1

Question 23 Chapter 4 of +2- Part-
Q-23 - CH-4 - Usha +2 Book 2018 - Solution

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Question 23 Chapter 4 of +2-Part-1

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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 ValueRevalued Amount
Land & Building2,00,0003,00,000
Equipment3,00,0002,80,000
Bank Loan1,00,00090,000
Outstanding salaries90,0001,20,000

The solution of Question 23 Chapter 4 of +2 Part-1: – 

Journal
DateParticulars
L.F.DebitCredit
      
 R’s Capital a/cDr. 18,000 
 To P’s Capital a/c   18,000
 (Being revaluation of assets and liabilities adjusted through capital accounts)    
      

 

Working Notes: –

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Calculation of the amount of Adjustment for revaluation of assets on change in profit sharing ratio:
Particular
PQR
All assets & liabilities distributed in old profit sharing 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(Dr.)9,000(Dr.)6,000(Dr.)
Total 30,000(Cr.)18,000(Cr.)12,000(Cr.)

 

Adjustment for revaluation of assets on change in profit sharing ratio:
Particular
PQR
As per New ratio 2:3:5   
Land & Building 20,000(Cr.)30,000(Dr)50,000(Dr.)
Equipment 4,000(Cr.)6,000(Cr.)6,000(Cr.)
Bank Loan 2,000(Dr.)3,000(Dr.)5,000(Dr.)
Outstanding Salaries 6,000(Cr.)9,000(Cr.)15,000(Cr.)
Total 12,000(Dr.)18,000(Dr.)30,000(Dr.)
Adjustment 18,000(Cr.) 18,000(Dr.)

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Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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