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M.70 An Aid to Accountancy—CBSE XII

2. Calculation of Gain (Profit)/Loss on Revaluation of Assets: `
Building 75,000
Machinery (10,000)
Patents and Copyrights (17,500)
Stock 75,000
Prepaid Insurance 5,000
Debtors (7,500)
Gain (Profit) on Revaluation 1,20,000
16. JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)
(i) Bad Debts A/c ...Dr. 4,500
To Debtors A/c 4,500
(Being ` 4,500 written off)
(ii) Provision for Doubtful Debts A/c ...Dr. 4,500
To Bad Debts A/c 4,500
(Being the provision utilised for writing off bad debts)
(iii) Revaluation A/c ...Dr. 975
To Provision for Doubtful Debts A/c 975
(Being the provision for doubtful debts maintained at 5%)
(iv) Outstanding Wages A/c ...Dr. 9,000
To Cash A/c 9,000
(Being the outstanding wages paid)
(v) Revaluation A/c ...Dr. 17,100
To Stock A/c 6,000
To Furniture A/c 1,500
To Machinery A/c 9,600
(Being the decrease in value of assets recorded)
(vi) Investments A/c ...Dr. 7,500
To Revaluation A/c 7,500
(Being the increase in value of investments recorded)
(vii) Revaluation A/c ...Dr. 6,300
To Sundry Creditors A/c 6,300
(Being the increase in amount of sundry creditors recorded)
(viii) A’s Capital A/c ...Dr. 11,813
B’s Capital A/c ...Dr. 5,062
To Revaluation A/c (WN) 16,875
(Being the loss on revaluation transferred to Partners’ Capital Accounts)
(ix) General Reserve A/c ...Dr. 15,000
To A’s Capital A/c 10,500
To B’s Capital A/c 4,500
(Being the General Reserve distributed among partners)
(x) Cash A/c ...Dr. 1,20,000
To C’s Capital A/c 90,000
To Premium for Goodwill A/c 30,000
(Being the cash received as C’s capital and premium for goodwill)
(xi) Premium for Goodwill A/c ...Dr. 30,000
To A’s Capital A/c 21,000
To B’s Capital A/c 9,000
(Being the premium for Goodwill credited to Old Partners’ Capital Accounts
in sacrificing ratio)
(xii) A’s Capital A/c ...Dr. 10,500
B’s Capital A/c ...Dr. 4,500
To Cash A/c 15,000
(Being the half of goodwill amount credited withdrawn by A and B)
Note: Entries (iii), (v) and (vii) may be combined as follows: