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Question
Pass entries in the firm's journal for the following on admission of a partner:
(i) Machinery be reduced by ₹ 16,000 and Building be appreciated by ₹ 40,000.
(ii) A provision be created for Doubtful Debts @ 5% of Debtors amounting to ₹ 80,000.
(iii) Provision for warranty claims be increased by ₹ 12,000.
Solution
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Journal |
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Date |
Particulars |
L.F. |
Debit Amount (Rs) |
Credit Amount (Rs) |
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|
(i) |
Revaluation A/c |
Dr. |
|
16,000 |
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To Machinery A/c |
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16,000 |
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(Value of machinery decreased) |
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Building A/c |
Dr. |
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40,000 |
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To Revaluation A/c |
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40,000 |
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(Value of building increased) |
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(ii) |
Revaluation A/c |
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To Provision for Doubtful Debts A/c |
Dr |
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4,000 |
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(Provision created on debtors) |
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4,000 |
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(iii) |
Revaluation A/c |
Dr. |
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12,000 |
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To Provision for Warranty Claims A/c |
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12,000 |
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(Liability recorded) |
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|
Balance Sheet of A and B as on 1.1.2016 |
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Liabilites |
Amount Rs |
Assets |
Amount Rs |
|
|
Creditors |
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Land & Building |
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|
Bills Payable |
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Ashish Capital |
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|
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|
|
Stock |
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|
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|
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|
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|
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Stock ₹ 60,000; Debtors ₹ 80,000; Land ₹ 1,00,000, Plant and Machinery ₹ 40,000.
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