Revaluation-Account(Admission of Pa.pptx

This presentation is Revaluation of Account ( Admission of Partner)

1. ADMISSION OF PARTNER

2. P arti c ula r s Rs. Revaluation Account Rs. P arti c ula r s D r . C r .

3. 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 Account D r . C r . * Note : Current A/c in case of Fixed Capitals

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 Account D r . C r . * 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 Profit transferred to : A ’ s Ca p i t al / Cur r e n t A / c ------- B ’ s Ca p i t al / Cur r e n t A / c ------- --------- By Loss transferred to : A ’ s Ca p i t al / Cur r e n t A / c ------- B ’ s Ca p i t al / Cur r e n t A / c ------- ---------- Revaluation Account D r . C r . * Note : Always distribute Profit /Loss of Revaluation A/c in Old Partners in Old Ratio

6. E x ampl e : 1 Balance Sheet (extract) Liabilities Rs. Assets Rs. Stock 50,000 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 Reduced by Rs.5,000

7. Particulars Rs. Particulars Rs. To Stock A/c 5,000 Revaluation Account D r . C r . 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

8. E x ampl e : 2 Balance Sheet (extract) Liabilities Rs. Assets Rs. Building 2,00,000 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 over valued by Rs.40,000

9. Particulars Rs. Particulars Rs. By Building A/c 40,000 Revaluation Account D r . C r . 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

10. E x ampl e : 3 Balance Sheet (extract) Liabilities Rs. Assets Rs. Creditors 70,000 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.

11. Particulars Rs. Particulars Rs. To Creditors A/c 1,000 Revaluation Account D r . C r . 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

12. E x ampl e : 4 Balance Sheet (extract) Liabilities Rs. Assets Rs. Sundry Creditors 30,000 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 .

13. Geeta Handa Particulars Rs. Particulars Rs. By Creditors A/c 1,500 Revaluation Account D r . C r . 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

14. Example: 5 Unrecorded Liability 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

15. Particulars Rs. Particulars Rs. To Outstanding Expenses A/c 3,200 Revaluation Account D r . C r . 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

16. Geeta Handa Example: 6 Unrecorded Assets 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 .

17. Particulars Rs. Particulars Rs. By Investments A/c 7,000 Revaluation Account D r . C r . J ournal 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

18. E x ampl e : 7 Balance Sheet (extract) Liabilities Rs. Assets Rs. Debtors 1,00,000 Less: Provision for Doubtful De b ts 7,0 93,000 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.

19. Particulars Rs. Particulars Rs. To Provision for Doubtful Debt A/c 3,000 Revaluation Account D r . C r . Journal Entry Date Particulars L.F Dr. ( Rs.). Cr. (Rs. ) Revaluation A/c Dr. T o P r o vision f o r Do u b t f u l Deb t A / c (Being Provision for doubtful debt ) 3,000 3,000

20. 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: Market Value of Stock is Rs.45,000.(Book value of Stock Rs.50,000) Building is to be appreciated by Rs.40,000. 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. A liability for Outstanding Expenses of Rs.3,200 is to be created. Unrecorded Investments were valued at Rs.7,000. Provision for Doubtful Debt be increased by Rs.3,000.

21. 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 Account D r . C r .

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 (2 : 1 ) to M’s Capital A/c 24,200 N’s Capital A/c 12,100 36,300 48,500 48,500 Revaluation Account D r . C r .

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