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Abhay is admitted as a partner for 1/4th share on 1st April, 2020 on the following terms: (a) Abhay is to bring ? 65,000 as capital after adjusting amount due to him included in creditors and his share of Goodwill. (b) 10,000 included in creditors is payable to Abhay which is to be transferred to his Capital Account is Furniture is to reduced by 3,000 and Plant and Machinery is to be increased to 198,000. (d) Stock is overvalued by 4,000. Pass the Journal entries for the above arrangement.?
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Abhay is admitted as a partner for 1/4th share on 1st April, 2020 on t...
Journal Entries for Admitting a Partner with Adjustments:
1. To adjust the value of Furniture and Plant and Machinery:
Furniture A/c Dr. 3,000
Plant and Machinery A/c Cr. 3,000
2. To transfer amount payable to Abhay from Creditors to his Capital Account:
Abhay’s Capital A/c Dr. 10,000
To Abhay’s Creditors A/c 10,000
3. To record Abhay’s Capital contribution:
Abhay’s Capital A/c Dr. 65,000
To Cash/Bank A/c 65,000
4. To write off the overvaluation of Stock:
Stock A/c Dr. 4,000
To P&L Adjustment A/c 4,000
Explanation:
1. Adjustment of Furniture and Plant and Machinery:
As per the terms of the agreement, the value of Furniture is to be reduced by ?3,000 and the value of Plant and Machinery is to be increased to ?198,000. To give effect to this adjustment, we will debit Furniture A/c by ?3,000 and credit Plant and Machinery A/c by ?3,000.
2. Transfer of amount payable to Abhay from Creditors to his Capital Account:
As per the agreement, ?10,000 included in creditors is payable to Abhay, which is to be transferred to his Capital Account. To give effect to this adjustment, we will debit Abhay’s Capital A/c by ?10,000 and credit Abhay’s Creditors A/c by ?10,000.
3. Recording Abhay’s Capital contribution:
As per the agreement, Abhay is to bring ?65,000 as capital after adjusting the amount due to him included in creditors and his share of Goodwill. To record Abhay’s capital contribution, we will debit Abhay’s Capital A/c by ?65,000 and credit Cash/Bank A/c by ?65,000.
4. Writing off the overvaluation of Stock:
As per the agreement, Stock is overvalued by ?4,000. To write off this overvaluation, we will debit Stock A/c by ?4,000 and credit P&L Adjustment A/c by ?4,000.
1. To adjust the value of Furniture and Plant and Machinery:
Furniture A/c Dr. 3,000
Plant and Machinery A/c Cr. 3,000
2. To transfer amount payable to Abhay from Creditors to his Capital Account:
Abhay’s Capital A/c Dr. 10,000
To Abhay’s Creditors A/c 10,000
3. To record Abhay’s Capital contribution:
Abhay’s Capital A/c Dr. 65,000
To Cash/Bank A/c 65,000
4. To write off the overvaluation of Stock:
Stock A/c Dr. 4,000
To P&L Adjustment A/c 4,000
Explanation:
1. Adjustment of Furniture and Plant and Machinery:
As per the terms of the agreement, the value of Furniture is to be reduced by ?3,000 and the value of Plant and Machinery is to be increased to ?198,000. To give effect to this adjustment, we will debit Furniture A/c by ?3,000 and credit Plant and Machinery A/c by ?3,000.
2. Transfer of amount payable to Abhay from Creditors to his Capital Account:
As per the agreement, ?10,000 included in creditors is payable to Abhay, which is to be transferred to his Capital Account. To give effect to this adjustment, we will debit Abhay’s Capital A/c by ?10,000 and credit Abhay’s Creditors A/c by ?10,000.
3. Recording Abhay’s Capital contribution:
As per the agreement, Abhay is to bring ?65,000 as capital after adjusting the amount due to him included in creditors and his share of Goodwill. To record Abhay’s capital contribution, we will debit Abhay’s Capital A/c by ?65,000 and credit Cash/Bank A/c by ?65,000.
4. Writing off the overvaluation of Stock:
As per the agreement, Stock is overvalued by ?4,000. To write off this overvaluation, we will debit Stock A/c by ?4,000 and credit P&L Adjustment A/c by ?4,000.
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Abhay is admitted as a partner for 1/4th share on 1st April, 2020 on the following terms: (a) Abhay is to bring ? 65,000 as capital after adjusting amount due to him included in creditors and his share of Goodwill. (b) 10,000 included in creditors is payable to Abhay which is to be transferred to his Capital Account is Furniture is to reduced by 3,000 and Plant and Machinery is to be increased to 198,000. (d) Stock is overvalued by 4,000. Pass the Journal entries for the above arrangement.?
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Abhay is admitted as a partner for 1/4th share on 1st April, 2020 on the following terms: (a) Abhay is to bring ? 65,000 as capital after adjusting amount due to him included in creditors and his share of Goodwill. (b) 10,000 included in creditors is payable to Abhay which is to be transferred to his Capital Account is Furniture is to reduced by 3,000 and Plant and Machinery is to be increased to 198,000. (d) Stock is overvalued by 4,000. Pass the Journal entries for the above arrangement.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Abhay is admitted as a partner for 1/4th share on 1st April, 2020 on the following terms: (a) Abhay is to bring ? 65,000 as capital after adjusting amount due to him included in creditors and his share of Goodwill. (b) 10,000 included in creditors is payable to Abhay which is to be transferred to his Capital Account is Furniture is to reduced by 3,000 and Plant and Machinery is to be increased to 198,000. (d) Stock is overvalued by 4,000. Pass the Journal entries for the above arrangement.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Abhay is admitted as a partner for 1/4th share on 1st April, 2020 on the following terms: (a) Abhay is to bring ? 65,000 as capital after adjusting amount due to him included in creditors and his share of Goodwill. (b) 10,000 included in creditors is payable to Abhay which is to be transferred to his Capital Account is Furniture is to reduced by 3,000 and Plant and Machinery is to be increased to 198,000. (d) Stock is overvalued by 4,000. Pass the Journal entries for the above arrangement.?.
Abhay is admitted as a partner for 1/4th share on 1st April, 2020 on the following terms: (a) Abhay is to bring ? 65,000 as capital after adjusting amount due to him included in creditors and his share of Goodwill. (b) 10,000 included in creditors is payable to Abhay which is to be transferred to his Capital Account is Furniture is to reduced by 3,000 and Plant and Machinery is to be increased to 198,000. (d) Stock is overvalued by 4,000. Pass the Journal entries for the above arrangement.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Abhay is admitted as a partner for 1/4th share on 1st April, 2020 on the following terms: (a) Abhay is to bring ? 65,000 as capital after adjusting amount due to him included in creditors and his share of Goodwill. (b) 10,000 included in creditors is payable to Abhay which is to be transferred to his Capital Account is Furniture is to reduced by 3,000 and Plant and Machinery is to be increased to 198,000. (d) Stock is overvalued by 4,000. Pass the Journal entries for the above arrangement.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Abhay is admitted as a partner for 1/4th share on 1st April, 2020 on the following terms: (a) Abhay is to bring ? 65,000 as capital after adjusting amount due to him included in creditors and his share of Goodwill. (b) 10,000 included in creditors is payable to Abhay which is to be transferred to his Capital Account is Furniture is to reduced by 3,000 and Plant and Machinery is to be increased to 198,000. (d) Stock is overvalued by 4,000. Pass the Journal entries for the above arrangement.?.
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