How to prepare revaluation account?

Dear Student, its good that you have understood the concept of Revaluation of Assets and Liabilities from Kavya. 
However, the solution of your query is already available in the NCERT solutions provided to you on our srite. To view, follow the link provided below:
https://www.meritnation.com/cbse/class12-commerce/ncert-solutions/accountancy/partnership-accounts/reconstitution-of-a-partnership-firm---admission-of-a-partner/page167-long-answers-qno1/435_2430_15047/do-you-advise-thatassets-and-liabilities-must-be-revalued
 

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 On upward revaluation of a fixed asset which has been previously subject to downward revaluation, an amount of the upward revaluation equal to the amount previously expensed is credited back to the Profit & Loss Account.

Example:
Machinery ‘A’ is purchased on 01-04-1999 for $100,000. It is depreciated using the Straight Line Method at the rate of 10% p.a.
PARTICULARSFirst RevaluationSecond Revaluation
Nature of Revaluationdownwardupward
Date of Revaluation01-04-200101-04-2004
Gross Cost100,00093,750
Less: Depreciation20,00046,875
Net Book Value80,00046,875
Revalued - Appraisal Method75,00055,000
Increase / (Decrease) in Net Book Value(5,000)8,125
Debit to Profit & Loss a/c5,0000
Credit to Profit & Loss a/c05,000
Credit to Revaluation Reserve03,125
 

 

@@cheers@@

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somewhat clear to me....

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want more explanation ?

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yes...

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HERE IS AN EXAMPLE THIS MAY HELP U 
 
Nikhil is admitted as a partner and assets are revalued and liabilities
reassessed as follows:
(i) Create a Provision for doubtful debt on debtors at Rs.800.
(ii) Building and investment are appreciated by 10%.
(iii) Machinery is deprecated at 5%
(iv) Creditors were overestimated by Rs.500.
Make journal entries and Prepare revaluation account before the admission
of Nikhil.
 
Solution
 
                                                                    Journal
Date                          Particulars              LF                    Debit            Credit
                                                                                            Amount        Amount
                                                                                               (Rs.)            (Rs.)
Revaluation A/c Dr. 800
To Provision for Doubtful Debts 800
[Provision made for doubtful debts]
Building A/c Dr.
Investment A/c Dr. 2,000
To Revaluation A/c 1,500
[Increase in the value of Building & 3,500
Investment]
Revaluation A/c Dr. 650
To Machinery A/c 650
[Decrease in the value of machinery]
Creditor A/c Dr. 500
To Revaluation A/c 500
[Value of creditors reduced by Rs.500]
 
Revaluation account
 
Dr.                                                                                                                                           Cr.
Particulars                     Amount (Rs.)                      Particulars                      Amount (Rs.)
Provision for Building       2,000
Doubtful Debts                    800                               Investment                                1,500
Machinery                              650                                 Creditors                                       500
Profit transferred to
Karan’s Capital    1,700
Tarun’s Capita     l 850
                                                2,550
                                                  4,000                                                                   4,000
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yaar i tried to post it leaving spaces properly but it is not there when i posted 

sorry abt that

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thnkss....now i understand it...

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 u r welcome ............

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this video help to undestand the concept of profit and loss approriation account

http://www.youtube.com/watch?feature=endscreen&NR=1&v=qMtWUFzx4Zw

 
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