Some more typical transactions:
| Effect of Transaction | on Revaluation Account | on Balance Sheet |
| 1.Creditors amounting to ₹1,000 were not likely to be claimed. Hence, be written back. | Cr. with ₹1,000 | Subtract from Creditors |
| 2. A debtor whose dues of ₹12,000 were written off as bad debts last year, paid ₹9,000 in full settlement. | Cr. with ₹9,000 | Bank increases by ₹9,000 |
| 3. Rajesh was to carry out reconstitution of the firm at a remuneration of ₹5,000. | Dr. with ₹5,000 | Rajesh’s capital increases by ₹5,000 |
| 4. Machinery taken by P (Partner) for ₹10,000 (Book Value of Machinery is ₹6,000). | Cr. with ₹4,000 | P’s Capital decreases by ₹10,000Machinery decreases by ₹6,000 |
| 5. Stock is overvalued by 10% (Book Value of Furniture is ₹22,000)Present value of Stock is 110% i.e. ₹22,000
If 110% is equal to = 22,000 Then, 1% …………… = 22,000/110 So, 100%...... = (22,000/110) X 100 = 20,000 |
Dr. with ₹2,000 | Stock decreases by ₹2,000 |
| 6. Stock is undervalued by 10% (Book Value of Stock is ₹18,000). | Cr. with ₹2,000 | Stock increases by ₹2,000 |
| 7. Stock was found overvalued by ₹7,000. | Dr. with ₹7,000 | Stock decreases by ₹7,000 |
| 8. Half of the Stock is taken by Q (Partner) for ₹20,000 and the balance is revalued at ₹30,000 (Book Value of Stock is ₹45,000). | Cr. with ₹5,000 | Q’s capital decreases by ₹20,000Stock decreases by ₹15,000 |
| 9. Stock included ₹2,000 for obsolete items. Hence are to be written back. | Dr. with ₹2,000 | Stock decreases by ₹2,000 |
| 10. A Bill Receivable of ₹7,000 previously discounted with the banker, was dishonoured on 31st March, 2022 but no entry has been passed for dishonor. | NIL | ₹7,000, Debtors increase₹7,000, Bank decreases |
| 11. Out of the amount of the insurance premium which was debited to Profit and Loss A/c, ₹800 to be carried forward to next year. | Cr. with ₹800 | Asset side ₹800 Prepaid Insurance |
| 12. Mahesh an old customer whose account was written off as bad debts, has promised to pay ₹4,000 in settlement of his dues. | Cr. with ₹4,000 | Debtors increase by ₹4,000 |
| Alternatively, The above transaction can be ignored, as only a promise is there. | NIL | NIL |
| 13. Bill accepted of ₹5,000 issued by creditors were not recorded in the books. | NIL | Creditors decreaseBills Payable increase |
| 14. Expenses debited in the Profit & Loss A/c included ₹1,000 paid for a partner’s personal expenses. | Cr. with ₹1,000 | Partner’s Capital Account decreases by ₹1,000 |
| 15. A credit purchase of goods for ₹1,200 were not recorded in the books but had been included in stock. | Dr. with ₹1,200 | Increase in Creditors ₹1,200 |
Revaluation Account
In this video the preparation of Revaluation Account has been explained. Almost all possible cases of revaluation have been handled here
Adjustments on Admission of New Partner
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