On the date of retirement of a partner Furniture Sundry debtors and provisions bad debtors stand in the books of A/c at Rs.50,000,Rs 45000, and Rs 4500 respectively. The partner decided to revalue assets as under furniture to be reduced to 85 % ,provision for bad debts to be brought to 20% of sundry debtors. The entry for revaluation of furniture in trade will be _______________.

revaluation A/c Dr. Rs.4250,to furniture by Rs.4250

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profit and loss A/c Dr. Rs.5000, stock in trade credit by Rs.5000

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partners Capital A/c Dr. Rs 7500 to revaluations A/c 7500

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revaluation A/c Dr. Rs.7500, furniture Cr .Rs.7500

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Solution

The correct option is D revaluation A/c Dr. Rs.7500, furniture Cr .Rs.7500
Revaluation account is an account prepare at the time of retirement or death of a partner. In this account, increase in value of assets or decrease in liabilities is recorded at credit side and decrease in value of asset and increase in liabilities recorded at debit side. Difference between both sides is calculated and transfer to partner's capital account.
In the given question, revaluation of furniture will be journalise as follows:
Revaluation A/c Dr. 7500
To Furniture A/c 7500
(being value of furniture decreased by 15%)

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Similar questions

Q. P, Q and R are three partners in a partnership firm X retirement stock, Sunday debtors and provision for bad debts stand in the books of A/c at Rs. 50,000,Rs.45000 and Rs.4500 respectively. The partners decided to revalue assets as under. Stock-in-trade to be reduced to 90%, provision for bad debts to be brought to 15% of Sundry debtors. The entry for revaluation of stock-in-trade will be ________.

Q. Shyamlal and Sanjay were in partnership business sharing profits and losses in the ratio of

2 : 3

respectively. Their Balance Sheet as at

31^{s t}

March, 2018 was:

Liabilities	(Rs.)	Assets	(Rs.)
Sundry Creditors Capital A/cs: Shyamlal 34,050 Sanjay 34,050	12,435 68,100	Cash in Hand Cash at Bank Sundry Debtors Stock Furniture Building	710 11,925 5,500 18,000 4,400 40,000
	80,535		80,535

1^{s t}

April,2018, they admitted Shankar into partnership for

1 / 3^{r d}

share in the future profits on the following terms:
(a) Shankar is to bring in

R s . 30, 000

as his capital and

R s . 20, 000

as goodwill which is to remain in the business.
(b) Stock and Furniture are to be reduced in value by

10 %

.
(c) Building is to be appreciated by

R s . 15, 000

.
(d) Provision of

5 %

is to be made on Sundry Debtors for Doubtful Debts.
(e) Unaccounted Accrued income of

R s . 2, 400

to be provided for. A debtor, whose dues of

R s . 4, 800

were written off as bad debts, paid

50 %

in full settlements.
(f) Outstanding Rent amounted to

R s . 4, 800

.
Show Profit and Loss Adjustment Account (Revaluation Account), Capital Accounts of Partners and opening Balance Sheet of the new firm.

Prepare the trading and profit and loss account and a balance sheet of M/s Shine Ltd. from the following particulars.

$\begin{matrix} Account Title & Amt.(Rs) & Account title & Amt.(Rs) Sundry Debtors & 1, 00, 000 & Bills Payable & 85, 550 Bad Debts & 3, 000 & Sundry Creditors & 25, 000 Trade Expenses & 2, 500 & Provision for Bad Debts & 1, 500 Printing and Stationery & 5, 000 & Return Outwards & 4, 500 Rent, Rates and Taxes & 3, 450 & Capital & 2, 50, 000 Freight & 2, 250 & Discount Received & 3, 500 Sales Return & 6, 000 & Interest Received & 11, 260 Motor Car & 25, 000 & Sales & 1, 00, 000 Opening Stock & 75, 550 Furniture and Fixture & 15, 500 Purchase & 75, 000 Drawings & 13, 560 Investments & 65, 500 Cash in Hand & 36, 000 Cash at Bank & 53, 000 ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 4, 81, 310 - -------- - - -------- - & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 4, 81, 310 - -------- - - -------- - \end{matrix}$