Question

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

Answer 1

Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
(i)	Revaluation A/c	Dr.		16,000
	To Machinery A/c				16,000
	(Value of machinery decreased)
	Building A/c	Dr.		40,000
	To Revaluation A/c				40,000
	(Value of building increased)
(ii)	Revaluation A/c
	To Provision for Doubtful Debts A/c	Dr		4,000
	(Provision created on debtors)				4,000
(iii)	Revaluation A/c	Dr.		12,000
	To Provision for Warranty Claims A/c				12,000
	(Liability recorded)