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प्रश्न
Give a word / term / phrase which can substitute the following statements :
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 deceased partner’s heir can be paid his share of profits that the firm has earned till the date of his death.
APPEARS IN
संबंधित प्रश्न
Following is the balance sheet at Sharmila, Urmila and Pramila, who shared profits and losses in the ratio of 5 : 3 : 2 respectively:
Balance Sheet as on 31st March, 2013
| Liabilities | Amount | Assets | Amount |
| Capital accounts: | Land and buildings | 250000 | |
| Sharmila | 2,00,000 | Plant and Machinery | 70000 |
| Urmila | 1,50,000 | Furniture | 20000 |
| Pramila | 1,00,000 | Sundry debtors | 90000 |
| Reserve fund | 50,000 | Stock | 56500 |
| Sundry creditors | 42,800 | Bills receivable | 7400 |
| Bills payable | 6,000 | Cash in hand | 3700 |
| Cash at bank | 51200 | ||
| 5,48,800 | 5,48,800 |
Pramila retired on 31st March, 2013 on the following terms:
(1) Goodwill of the firm was valued at Rs 60,000. It was decided that ‘goodwill’ should be raised to the extent of Pramila’s share only, and to be written off immediately.
(2) Land and building to be appreciated by Rs 20,000. Stock is revalued at Rs 58,500. Furniture is to be depreciated by 10%.
(3) Amount payable to Pramila is to be transferred to her loan account.
Give Journal Entries in the books of the firm.
Write the term / word / phrase which can substitute the following statement :
Debit balance of revaluation account.
State whether the following statements is true or false :
Revaluation account is also called Realisation account.
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 :
Excess of credit side over debit side of revaluation account.
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.
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, 2020 was as follows:
| Liabilities | Amt (Rs.) |
Assets | Amt (Rs.) |
| 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 | 207,000 |
| Parakaram’s Capital | 75,500 | Patents | 9,000 |
| 2,85,000 | 2,85,000 |
Brijesh retired on March 31, 2020 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, 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.
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.
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?
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.
An account operated to ascertain the loss or gain at the time of death of a partner is called ______.
D, E and F were partners in a firm sharing profits in the ratio of 5 : 2 : 3. On 31.3.2022 their balance sheet was as follows:
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) |
| Creditors | 53,000 | Cash | 16,000 | |
| Bills Payable | 62,000 | Bank | 17,000 | |
| General Reserve | 2,00,000 | Stock | 18,000 | |
| Capitals: | Debtors | 1,99,000 | ||
| D | 7,00,000 | 18,00,000 | Investments | 1,15,000 |
| E | 5,00,000 | Machinery | 7,50,000 | |
| F | 6,00,000 | Land and Building |
10,00,000 | |
| 21,15,000 | 21,15,000 |
On the above date D retired from the firm and the following was agreed upon:
- Goodwill of the firm was valued at ₹ 1,00,000, D's share of goodwill was adjusted through the capital accounts of remaining partners.
- Investments were to be brought to their market value which was ₹ 85,000.
- Machinery was to be depreciated to ₹ 7,00,000.
- Land and Building was to be appreciated to ₹ 12,00,000.
- The balance in D's capital account was transferred to his loan account.
Prepare Revaluation Account and D's Capital Account on his retirement.
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.
L, M and N were partners in a firm sharing profit & losses in the ratio of 2:2:3. On 31st March 2023, their Balance Sheet was as follows:
| Liabilities | Amount (₹) | Assets | Amount (₹) | |
| Creditors | 80,000 | Land and Building | 5,00,000 | |
| Bank overdraft | 22,000 | Machinery | 2,50,000 | |
| Long term debts | 2,00,000 | Furniture | 3,50,000 | |
| Capital A/cs: | Investments | 1,00,000 | ||
| L | 6,25,000 | Stock | 4,00,000 | |
| M | 4,00,000 | Debtors | 2,00,000 | |
| N | 5,25,000 | 15,50,000 | Bank | 20,000 |
| Employees provident fund | 38,000 | Deferred Advertisement Expenditure | 70,000 | |
| 18,90,000 | 18,90,000 |
On 31st March 2023, M retired from the firm and remaining partners decided to carry on business. It was decided to revalue assets and liabilities as under:
- Land and Building be appreciated by ₹ 2,40,000 and Machinery be depreciated 10%.
- 50% of investments were taken by the retiring partner at book value.
- Provision for doubtful debts was to be made at 5% on debtors.
- Stock will be valued at market price which is ₹ 1,00,000 less than the book value.
- Goodwill of the firm be valued at ₹ 5,60,000. L and N decided to share future profits and losses in the ratio of 2:3.
- The total capital of the new firm will be ₹ 32,00,000 which will be in proportion of profit-sharing ratio of L and N.
- Gain on revaluation account amounted to ₹ 1,05,000.
Prepare Partner’s Capital accounts and Balance sheet of firm after M’s retirement.
Himanshu, Gagan, and Naman are partners who share profits and losses in the ratio of 3: 2: 1. On March 31, 2017, Naman retired. The firm's various assets and liabilities on that 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.
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.
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, 2017 was as follows:
| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
| 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, 2017 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.
