Question

X and Y are partners in a firm sharing profits in the ratio of 3 : 2. They admitted Z as a partner for 1/4th share. At the time of admission of Z, Stock (Book Value ₹ 1,00,000) is to be reduced by 40% and Furniture (Book Value ₹ 60,000) is to be reduced to 40%. Pass the necessary Journal entries.

Answer 1

Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Revaluation A/c	Dr.		76,000
	To Stock A/c				40,000
	To Furniture A/c				36,000
	(Value of assets decreased)
	X’s Capital A/c	Dr.		45,600
	Y’s Capital A/c	Dr.		30,400
	To Revaluation A/c				76,000
	(Loss on Revaluation transferred to Partners’ Capital A/c)