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प्रश्न
Write the term / word / phrase which can substitute the following statement :
The account which shows revaluation of assets and liabilities.
उत्तर
Revaluation or Profit and Loss Adjustment Account
Explanation: The account which shows revaluation of assets and liabilities is called Revaluation or Profit and Loss Adjustment Account. This account records the revised values of assets and liabilities, so that the retiring partner can be paid his share of profits that the firm has earned till the date of his retirement.
APPEARS IN
संबंधित प्रश्न
Pass the necessary Journal entries for the following transaction on the dissolution of the firm of P and Q after the various assets (Other than cash) and outside liabilities have been transferred to Realisation Account.
(i) Bank Loan Rs 12,000 was paid.
(ii) Stock worth Rs 16,000 was taken over by Partner Q.
(iii) Partner P paid a creditor Rs 4,000
(iv) An assets not appearing in the books of accounts realized Rs 1,200.
(v) Expenses of realisation Rs 2,000 were paid by partner Q.
(vi) Profit on realization Rs 36,000 was distributed between P and Q in 5 : 4 ratio.
On 31-3-2010 the Balance Sheet of W and R who shared profits in 3 : 2 ratio was as follows:
|
Liabilities |
Amount Rs |
Assets |
Amount Rs |
||
|
Creditors |
20,000 |
Cash |
5,000 |
||
|
Profit and Loss Account |
15,000 |
Sundry Debtors |
20,000 |
|
|
|
Capital Accounts: |
|
Less: Provision |
(700) |
19,300 |
|
|
W |
40,000 |
|
Stock |
25,000 |
|
|
R |
30,000 |
70,000 |
Plant and Machinery |
35,000 |
|
|
|
|
Plants |
20,700 |
||
|
|
1,05,000 |
|
1,05,000 |
||
|
|
|
|
|
||
On this date B was admitted as a partner on the following conditions:
(a) ‘B’ will get 4/15th share profits.
(b) ‘B’ had to bring Rs 30,000 as his capital to which amount other Partners capital shall have to be adjusted.
(c) He would pay cash for his share of goodwill which would be based on 2½ years purchase of average profits of past 4 years.
(d) The assets would be revalued as under:
Sundry debtors at the book value less 5% provision for bad debts. Stock at Rs 20,000, Plant and Machinery at Rs 40,000.
(e) The profits of the firm for the years 2007, 2008 and 2009 were Rs 20,000; Rs 14,000 and Rs 17,000 respectively.
Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the new firm.
State whether the following statements is true or false :
Profit on revaluation account is transferred to continuing partners’ capital account only.
Give a word / term / phrase which can substitute the following statements :
The account which shows revaluation of assets and liabilities.
Why do firm revaluate assets and reassess their liabilities on retirement or on the event of death of a partner?
Himanshu, Gagan and Naman are partners sharing profits and losses in the ratio of 3:2:1. On March 31, 2017, Naman retires.
The various assets and liabilities of the firm on the date were as follows:
Cash Rs 10,000, Building Rs 1,00,000, Plant and Machinery Rs 40,000, Stock Rs 20,000, Debtors Rs 20,000 and Investments Rs 30,000.
The following was agreed upon between the partners on Naman’s retirement:
(i) Building to be appreciated by 20%.
(ii) Plant and Machinery to be depreciated by 10%.
(iii) A provision of 5% on debtors to be created for bad and doubtful debts.
(iv) Stock was to be valued at Rs 18,000 and Investment at Rs 35,000.
Record the necessary journal entries to the above effect and prepare the Revaluation Account.
Himanshu, Gagan and Naman are partners sharing profits and losses in the ratio of 3:2:1. On March 31, 2019, Naman retires.
The various assets and liabilities of the firm on the date were as follows:
Cash Rs 10,000, Building Rs 1,00,000, Plant and Machinery Rs 40,000, Stock Rs 20,000, Debtors Rs 20,000 and Investments Rs 30,000.
The following was agreed upon between the partners on Naman’s retirement:
|
(i) |
Building to be appreciated by 20%. |
|
(ii) |
Plant and Machinery to be depreciated by 10%. |
|
(iii) |
A provision of 5% on debtors to be created for bad and doubtful debts. |
|
(iv) |
Stock was to be valued at Rs 18,000 and Investment at Rs 35,000. |
Record the necessary journal entries to the above effect and prepare the Revaluation Account.
Select the most appropriate alternative from given below and rewrite the statement :
Assets and Liabilities are transferred to Realisation Account at their __________ values.
|
Liabilities
|
Amount
|
Assets
|
Amount
|
|
Capital A/c
|
Building
|
100000
|
|
|
Ganga
|
100000
|
Furniture
|
10000
|
|
Yamuna
|
75000
|
Stock
|
31000
|
|
Creditors
|
10000
|
Debtors 50000
|
|
|
Bills Payable
|
5000
|
Less: R.D.D. -1000
|
49000
|
|
General Reserve
|
15000
|
Bank
|
15000
|
|
205000
|
205000
|
Fill in the blanks:
In case of retirement of a partner, profit or loss on revaluation of assets and re-assessment of liabilities is distributed among _________ partners in ___________ ratio.
Complete the sentence?
______ is an asset is an asset that is not physical in nature. Brand recognition, Goodwill and intellectual property such as patent etc. are examples of it.
If at the time of retirement, there is some unrecorded asset, it will be ______ to ______ Account.
At the time of retirement of a partner 'Loss on Revaluation' is debited ______.
Assertion (A): On retirement, of a partner's the old partnership agreement comes to an end and a new partnership agreement comes into existence between the remaining partners.
Reason (R): Retirement of the partnership leads to the reconstitution of the firm.
X, Y and Z were partners. On 30th June 2019 Y retired. The extract of their balance sheet is given below:
| Balance Sheet [An Extract] | |||
| Liabilities | Amount (₹) |
Assets | Amount (₹) |
| Investment Fluctuation Fund | 10,000 | Investments [Market value ₹ 80,000] |
1,00,000 |
What Journal Entry will be passed for the above item on Y's retirement?
At the time of retirement of a partner, profit on revaluation will be credited to the capital accounts of ______.
When the Balance Sheet is prepared after the retirement of a partner (subsequent to the preparation of the Revaluation Account), ______ values are shown in it.
Amay, Bina and Chander are partners in a firm with capital balances of ₹ 50,000, ₹ 70,000 and ₹ 80,000 respectively on 31st March, 2022. Amay decides to retire from the firm on 31st March 2022. With the help of the information provided, calculate the amount to be paid to Amay on his retirement. There existed a general reserve of ₹ 7,500 in the balance sheet on that date. The goodwill of the firm was valued at ₹ 30,000. Gain on revaluation was ₹ 24,000.
P, Q and R were partners in a firm sharing profits in the ratio of 3 : 2 : 1 respectively. On March 31st, 2022, the balance sheet of the firm stood as follows:
| Balance Sheet | ||||
| Liabilities | Amount (₹) | Assets | Amount (₹) | |
| Creditors | 13,000 | Cash | 4,700 | |
| Bills Payable | 590 | Debtors | 8,000 | |
| Capital Accounts: | Stock | 11,690 | ||
| P | 15,000 | 35,000 | Buildings | 23,000 |
| Q | 10,000 | Profit and Loss A/c | 1,200 | |
| R | 10,000 | |||
| 48,590 | 48,590 | |||
Q retired on the above-mentioned date on the following terms:
- Buildings to be appreciated by ₹ 7,000
- A provision for doubtful debts to be made at 5 % on debtors.
- Goodwill of the firm is valued at ₹ 18,000 and adjustment to be made by raising and writing off the goodwill.
- ₹ 2,800 was to be paid to Q immediately and the balance in his capital account to be transferred to his loan account carrying interest as per the agreement.
- Remaining partner decided to maintain equal capital balances, by opening current account.
Prepare the revaluation account and partner’s capital accounts.
X, Y and Z were partners in a firm sharing profit and losses in the ratio of 5 : 3 : 2. On 31.3.2022 X retired from the firm. On X's retirement the firm had a balance of ₹ 90,000 in the General Reserve Account. The revaluation of assets and reassessment of liabilities resulted in a loss of ₹ 70,000. Pass necessary journal entries for the above transactions on X's retirement.
Radhika, Ridhima and Rupanshi were partners in a firm sharing profits and losses in the ratio of 3:5:2. On 31st March, 2022, their balance sheet was as follows :
| Balance Sheet of Radhika, Ridhlma and Rupanshi as on 31.3.2022 | |||||
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) | Amount (₹) |
| Sundry Creditors | 60,000 | Cash | 50,000 | ||
| General Reserve | 40,000 | Stock | 80,000 | ||
| Capitals: | Debtors | 40,000 | |||
| Radhika | 3,00,000 | 6,00,000 | Investments | 30,000 | |
| Ridhima | 2,00,000 | Buildings | 5,00,000 | ||
| Rupanshi | 1,00,000 | ||||
| 7,00,000 | 7,00,000 | ||||
Ridhima retired on the above date and it was agreed that:
- Goodwill of the firm be valued at ₹ 3,00,000.
- Building was valued at ₹ 6,20,000.
- Capital of the new firm was fixed at ₹ 5,00,000 which will be in the new profit sharing ratio of the partners; the necessary adjustments for this purpose were to be made by opening current accounts of the partners.
Prepare Revaluation Account and Partners' Capital Accounts on Ridhima's retirement.
Digvijay, Brijesh and Parakaram were partners in a firm sharing profits in the ratio of 2 : 2 : 1. Their Balance Sheet as on March 31, 2007, was as follows:
| Liabilities | ₹ | Assets | ₹ |
| Creditors | 49,000 | Cash | 8,000 |
| Reserves | 18,500 | Debtors | 19,000 |
| Digvijay's Capital | 82,000 | Stock | 42,000 |
| Brijesh's Capital | 60,000 | Buildings | 2,07,000 |
| Parakaram's Capital | 75,500 | Patents | 9,000 |
| 2,85,000 | 2,85,000 |
Brijesh retired on March 31, 2007, on the following terms:
- Goodwill of the firm was valued at Rs. 70,000 and was not to appear in the books.
- Bad debts amounting to Rs. 2,000 were to be written off.
- Patents were considered as valueless.
Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of Digvijay and Parakaram after Brijesh’s retirement.
Himanshu, Gagan and Naman are partners sharing profits and losses in the ratio of 3 : 2 : 1. On March 31, 2017, Naman retires. The various assets and liabilities of the firm on the date were as follows: Cash Rs. 10,000, Building Rs. 1,00,000, Plant and Machinery Rs. 40,000, Stock Rs. 20,000, Debtors Rs. 20,000 and Investments Rs. 30,000.
The following was agreed upon between the partners on Naman’s retirement:
- Building to be appreciated by 20%.
- Plant and Machinery to be depreciated by 10%.
- A provision of 5% on debtors to be created for bad and doubtful debts.
- Stock was to be valued at Rs. 18,000 and Investment at Rs. 35,000.
Record the necessary journal entries to the above effect and prepare the revaluation account.
