4 Machinery is to be valued at 5%more than its book value 5 Motor car is - Accountancy - Reconstitution- Retirement/Death of a Partner

Question

4 Machinery is to be valued at 5%more than its book value
5 Motor car is revalued at ?15500 Retiring partner took over motor
car at this value
6 Deepak be paid ?2000 in cash and balance be transferred to his
loan a/c
Show necessary journal entries Prepare revaluation a/c ,capital a/c
and opening balance sheet of continuing partners

Neha Arora · Accepted Answer

Dear Student,

Journal

Date
Particulars
L
F
Debit
Amount
(Rs)
Credit
Amount
(Rs)

Manoj’s
Capital A/c
Dr

1,333

Naveen’s
Capital A/c
Dr

1,000

Deepak’s
Capital A/c

667

To Old Goodwill
A/c

3,000

(Old goodwill
written off)

Manoj’s
Capital A/c
Dr

2,667

Naveen’s
Capital A/c

2,000

To Deepak’s
Capital A/c

4,667

(Goodwill credited
to Deepak)

Revaluation
Account

Dr

Cr

Particulars
Amount
Rs
Particulars
Amount
Rs

Motor
Car
4,500
Stock
1,350

Provision for
DD
450

Machinery
900

Loss on
Revaluation

Manoj
800

Naveen
600

Deepak
400
1,800

4,500

Dr
Partners’
Capital Accounts
Cr

Particulars
Manoj
Naveen
Deepak
Particulars
Manoj
Naveen
Deepak

Revaluation
A/c
800
600
400
Balance
b/d
50,000
39,000
30,000

Old Goodwill
A/c
1,333
1,000
667
Manoj’s
Capital A/c

2,667

Motor
Car

15,500
Naveen’s
Capital A/c

2,000

Deepak’s
Capital A/c
2,667
2,000

Cash
A/c

2,000

Deepak Loan’s
A/c

16,100

Balance
c/d
45,200
35,400

50,000
39,000
34,667

Balance
Sheet

Liabilities
Amount
Rs
Assets
Amount
Rs

Creditors
7,000
Cash (5,900 –
2,000)
3,900

Capital
A/c

Debtors (Less
Provision)
18,050

Manoj
45,200

Stock
14,850

Naveen
35,400
80,600
Building
48,000

Deepak’s
Loan
16,100
Plant &
Machinery
18,900

1,03,700

Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)

	Manoj’s Capital A/c	Dr.		1,333
	Naveen’s Capital A/c	Dr.		1,000
	Deepak’s Capital A/c			667
	To Old Goodwill A/c				3,000
	(Old goodwill written off)

	Manoj’s Capital A/c	Dr.		2,667
	Naveen’s Capital A/c			2,000
	To Deepak’s Capital A/c				4,667
	(Goodwill credited to Deepak)

Revaluation Account
Dr.					Cr.
Particulars	Amount Rs	Particulars		Amount Rs
Motor Car	4,500	Stock		1,350
		Provision for DD		450
		Machinery		900
		Loss on Revaluation
		Manoj	800
		Naveen	600
		Deepak	400	1,800

	4,500			4,500

Dr.	Partners’ Capital Accounts								Cr.
Particulars		Manoj	Naveen	Deepak	Particulars	Manoj	Naveen	Deepak
Revaluation A/c		800	600	400	Balance b/d	50,000	39,000	30,000
Old Goodwill A/c		1,333	1,000	667	Manoj’s Capital A/c			2,667
Motor Car				15,500	Naveen’s Capital A/c			2,000
Deepak’s Capital A/c		2,667	2,000
Cash A/c				2,000
Deepak Loan’s A/c				16,100
Balance c/d		45,200	35,400
		50,000	39,000	34,667		50,000	39,000	34,667

Balance Sheet
Liabilities		Amount Rs	Assets	Amount Rs
Creditors		7,000	Cash (5,900 – 2,000)	3,900
Capital A/c			Debtors (Less Provision)	18,050
Manoj	45,200		Stock	14,850
Naveen	35,400	80,600	Building	48,000
Deepak’s Loan		16,100	Plant & Machinery	18,900
		1,03,700		1,03,700