(i)	Building to be appreciated by 20%.
(ii)	Plant and Machinery to be depreciated by 10%.
(iii)	A provision of 5% on debtors to be created for bad and doubtful debts.
(iv)	Stock was to be valued at Rs 18,000 and Investment at Rs 35,000.

Record the necessary journal entries to the above effect and prepare the Revaluation Account.

Himanshu, Gagan and Naman are partners sharing profits and losses in the ratio of 3 : 2 : 1. On March 31, 2007, Naman retires. The various assets and liabilities of the firm on the date were as follows Cash Rs. 10,000, Building Rs. 1,00,000, Plant and Machinery Rs. 40,000, Stock Rs. 20,000, Debtors Rs. 20,000 and Investments Rs.30,000.

(i) Building to be appreciated by 20 %.

(ii) Plant and Machinery to be depreciated by 10 %.

(iii) A provision of 5 % on debtors to be created for bad and doubtful debts.

(iv) Stock was to be valued at Rs. 18,000 and Investment at Rs. 35,000.

Record the necessary journal entries to the above effect and prepare the revalution account.

Q. N, S and G were partners in a firm sharing profits and losses in the ratio of 2 : 3 : 5. On 31st March, 2016 their Balance Sheet was as under:

Liabilities		Amount (₹)	Assets		Amount (₹)
Creditors		1,65,000	Cash		1,20,000
General Reserve		90,000	Debtors	1,35,000
Capitals:			Less: Provision	15,000	1,20,000
N	2,25,000		Stock		1,50,000
S	3,75,000		Machinery		4,50,000
G	4,50,000	10,50,000	Patents		90,000
			Building		3,00,000
			Profit and Loss Account		75,000
		13,05,000			13,05,000

G retired on the above date and it was agreed that:
(a) Debtors of ₹ 6,000 will be written off as bad debts and a provision of 5% on debtors for bad and doubtful debts will be maintained.
(b) Patents will be completely written off and stock, machinery and building will be depreciated by 5%.
(c) An unrecorded creditor of ₹ 30,000 will be taken into account.
(d) N and S will share the future profits in 2 : 3 ratio.
(e) Goodwill of the firm on G's retirement was valued at ₹ 90,000.
Pass necessary Journal entries for the above transactions in the books of the firm on G's retirement.

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Revaluation Account
Dr.					Cr.
Particulars		Amount Rs	Particulars	Amount Rs
Plant and Machinery (40,000 × 10%)		4,000	Building (1,00,000 × 20%)	20,000
Provision for Doubtful Debts		1,000	Stock of Finished Goods	5,000
Stock of Raw Materials		2,000	Computer	2,000
Workmen’s Compensation Claim		5,000
Profit transferred to:
A’s Capital A/c	6,000
B’s Capital A/c	6,000
C’s Capital A/c	3,000	15,000
		27,000		27,000

Journal
Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
Building A/c	Dr.		20,000
Stock of Finished Good A/c	Dr.		5,000
Computer A/c	Dr.		2,000
To Revaluation A/c				27,000
(Increase in value Assets transferred to Revaluation Account)

Revaluation A/c	Dr.		12,000
To Plant and Machinery A/c				4,000
To Provision for Doubtful Debts A/c				1,000
To Stock of Raw Material A/c				2,000
To Workmen’s Compensation Claim A/c				5,000
(Decrease in value of Assets and increase in Liabilities transferred to Revaluation Account)

Revaluation A/c	Dr.		15,000
To A’s Capital A/c				6,000
To B’s Capital A/c				6,000
To C’s Capital A/c				3,000
(Revalution Profit transferred to Partners’ Capital accounts)