Question

Pass entries in the firm's Journal for the following on admission of a partner:
(i) Machinery be depreciated by $Rs.16,000$ and Building be appreciated by $Rs.40,000$.
(ii) A provision be creaated for Doubtful Debts @ $5\%$ of Debtors amounting to $Rs.80,000$.
(iii) Provision for warranty claims be increased by $Rs.12,000$.

Answer 1

JOURNAL

(i) Revaluation a/c.... Dr. 16000

To Machinery a/c 16000

(Being depreciation on machinery transferred to Revaluation account)

Building a/c..... Dr. 40000

To Revaluation a/c 40000

(Being appreciation on buildingtransferred to Revaluation account)

(ii) Revaluation a/c...... Dr. 4000

To Provision for Doubtful Debts a/c 4000

(Being provision of 5% on debtors created)

(iii) Revaluation a/c.... Dr. 12000

To Provision for Warranty Claims 12000

(Being provision for warranty claims increased andtransferred to Revaluation account)