Question

X and Y are partners in a firm sharing profits in the ratio of 3 : 2. They admitted Z as a partner and fixed the new profit-sharing ratio as 3 : 2 : 1. At the time of admission of Z, Debtors and Provision for Doubtful Debts appeared at ₹ 50,000 and ₹ 5,000 respectively all debtors are good. Pass the necessary Journal entries.

Answer 1

Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
(i)	Provision for Doubtful Debts A/c	Dr.		5,000
	To Revaluation A/c				5,000
	(Provision on Debtors reduced)
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(ii)	Revaluation A/c	Dr.		5,000
	To X’s Capital A/c				3,000
	To Y’s Capital A/c				2,000
	(Profit on Revaluation transferred to Partners’ Capital A/c)