Question 23 Chapter 6 of +2-A - T.S. Grewal 12 Class Part

Question 23 Chapter 6 of +2-A

Table of Contents

The solution of Question 23 Chapter 6 of +2-A: –

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

23. X, Y, and Z are partners sharing profits and losses in the ratio of 5: 3: 2. Z retired and on the
date of his retirement, the following adjustments were agreed upon:
a) The value of Furniture is to be increased by 12,000.
b) The value of the stock to be decreased by 10,000.
c) The machinery of the book value of 50,000 is to be depreciated by 10%.
d) A Provision for Doubtful Debts @ 5% is to be created on debtors of the book value of 40,000.
e) Unrecorded Investment worth 10,000.
f) An item of 1,000 included in bills payable is not likely to be claimed, hence should be written back.
Pass necessary Journal entries.

The solution of Question 23 Chapter 6 of +2-A: –

Revaluation A/c
Particular		Amount	Particular	Amount
To Stock		10,000	By Furniture A/c	12,000
To Machinery A/c		5,000	By Investments A/c	10,000
To Provision for Doubtful Debts a/c		2,000	By Bills Payable A/c	1,000
To Profit transferred to
X’s Capital	3,000
Y’s Capital	1,800
Z’s Capital	1,200	6,000
		23,000		23,000

Journal Entries

Date	Particulars		L.F.	Debit	Credit
	Furniture A/c	Dr.		12,000
	To Revaluation A/c				12,000
	(Being Increase in the value of furniture transferred to revaluation account)

	Revaluation A/c	Dr.		10,000
	To Stock A/c				10,000
	(Being decrease in the value of the stock transferred to the revaluation account)

	Revaluation A/c	Dr.		5,000
	To Machinery A/c				5,000
	(Being decrease in the value of Machinery transferred to the revaluation account)

	Revaluation A/c	Dr.		2,000
	To Provision for Doubtful Debts A/c				2,000
	(Being Increase in liabilities to Revaluation Account)

	Investments A/c	Dr.		10,000
	To Revaluation A/c				10,000
	(Being Increase in the value of Investment transferred to revaluation account)

	Bills Payable A/c	Dr.		1,000
	To Revaluation A/c				1,000
	(Being Increase in the value of Bills Receivable transferred to revaluation account)

	Revaluation A/c	Dr.		6,000
	To X’s Capital A/c				3,000
	To Y’s Capital A/c				1,800
	To Z’s Capital A/c				1,200
	(Being Revaluation profit transferred to Partners′ Capital Accounts)

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
Chapter No. 3 – Goodwill: Nature and Valuation
Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
Chapter No. 5 – Admission of a Partner
Chapter No. 6 – Retirement/Death of a Partner
Chapter No. 7 – Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

Chapter No. 8 – Company Accounts – Accounting for Share Capital
Chapter No. 9 – Company Accounts – Issue of Debentures
Chapter No. 10 – Redemption of Debentures

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

Chapter No. 1 – Financial Statements of a Company
Chapter No. 2 – Financial Statement Analysis
Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
Chapter No. 4 – Accounting Ratios
Chapter No. 5 – Cash Flow Statement

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