Journal Entries for Changes in Assets and Liabilities

Introduction:
Journal entries are the primary step in the accounting cycle. Any transaction affecting the financial position of an entity needs to be recorded through a journal entry. In this case, we have four changes in assets and liabilities that require journal entries.

Changes in Assets and Liabilities:
The four changes in assets and liabilities are as follows:
(i) Stock at Rs. 24,000
(ii) Factory building is appreciated by 10%
(iii) Reserve and doubtful debts is to be increased up to Rs. 1,000
(iv) Plant and Machinery depreciated by 10%

Journal Entries:
The journal entries for the above changes in assets and liabilities are as follows:

(i) Stock at Rs. 24,000
When the stock is purchased, the following journal entry is recorded:
Inventory A/C Dr. 24,000
To Cash/Bank A/C 24,000

(ii) Factory building is appreciated by 10%
When the factory building is appreciated, the following journal entry is recorded:
Building A/C Dr. 10%
To Revaluation Reserve A/C 10%

(iii) Reserve and doubtful debts is to be increased up to Rs. 1,000
When the reserve and doubtful debts are increased, the following journal entry is recorded:
Bad Debts A/C Dr. 1,000
To Provision for Doubtful Debts A/C 1,000

(iv) Plant and Machinery depreciated by 10%
When the plant and machinery are depreciated, the following journal entry is recorded:
Depreciation A/C Dr. 10%
To Plant and Machinery A/C 10%

Conclusion:
Journal entries are the essential step in the accounting cycle as they record the financial transactions of an entity. The above changes in assets and liabilities require the appropriate journal entries to be recorded in the books of accounts.