A and B are partners sharing profit and losses in the ratio of 5:3.The...
Journal Entries to Record the Revaluation of Assets and Liabilities:
1. Increase in Machinery:
Machinery A/C Dr. 10,000
To Revaluation A/C 10,000
2. Decrease in Furniture:
Revaluation A/C Dr. 2,000
To Furniture A/C 2,000
3. Increase in Land:
Land A/C Dr. 20,000
To Revaluation A/C 20,000
4. Recording of Unrecorded Asset:
Unrecorded Asset A/C Dr. 2,000
To Revaluation A/C 2,000
5. Increase in Liability:
Revaluation A/C Dr. 10,000
To Liability A/C 10,000
6. Recording of Outstanding Expenses:
Revaluation A/C Dr. 1,200
To Outstanding Expenses A/C 1,200
7. Adjustment of General Reserve:
General Reserve A/C Dr. 20,000
To Revaluation A/C 20,000
Explanation:
1. Revaluation of Machinery:
Machinery is revalued upwards by 10,000. To record this revaluation, we debit the Machinery A/C and credit the Revaluation A/C.
2. Revaluation of Furniture:
Furniture is revalued downwards by 2,000. To record this revaluation, we debit the Revaluation A/C and credit the Furniture A/C.
3. Revaluation of Land:
Land is revalued upwards by 20,000. To record this revaluation, we debit the Land A/C and credit the Revaluation A/C.
4. Recording of Unrecorded Asset:
An unrecorded asset of 2,000 is now being recorded. To record this, we debit the Unrecorded Asset A/C and credit the Revaluation A/C.
5. Increase in Liability:
Liabilities are increased by 10,000. To record this increase, we debit the Revaluation A/C and credit the Liability A/C.
6. Recording of Outstanding Expenses:
Outstanding expenses of 1,200 are now being recorded. To record this, we debit the Revaluation A/C and credit the Outstanding Expenses A/C.
7. Adjustment of General Reserve:
The balance of the General Reserve is 20,000. To adjust this balance, we debit the General Reserve A/C and credit the Revaluation A/C.
These journal entries will record the revaluation of assets and liabilities and adjust the necessary accounts accordingly.
A and B are partners sharing profit and losses in the ratio of 5:3.The...
All assets and liabilities ki