Question 46:
X and Y are partners in a firm sharing profits in the ratio of 3 : 2. They admitted Z as a partner and fixed the new profit-sharing ratio as 3 : 2 : 1. At the time of admission of Z, Debtors and Provision for Doubtful Debts appeared at₹50,000 and ₹5,000 respectively all debtors are good. Pass the necessary Journal entries.
Answer:
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Journal |
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Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
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(i) |
Provision for Doubtful Debts A/c |
Dr. |
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5,000 |
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To Revaluation A/c |
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5,000 |
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(Provision on Debtors reduced) |
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(ii) |
Revaluation A/c |
Dr. |
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5,000 |
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To X’s Capital A/c |
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3,000 |
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To Y’s Capital A/c |
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2,000 |
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(Profit on Revaluation transferred to Partners’ Capital A/c) |
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Question 47:
Ashok and Bhaskar are partners in a firm sharing profits in the ratio of 3 : 2. They admitted Chaman as a partner for 1/4th share of profits. At the time of admission of Chaman, Debtors and Provision for Doubtful Debts appeared at ₹ 76,000 and ₹ 8,000 respectively. ₹ 6,000 of the debtors proved bad. A provision of 5% is to be created on Sundry Debtors for doubtful debts. Pass the necessary Journal entries.
Answer:
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Journal |
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Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
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(i) |
Bad Debts A/c |
Dr. |
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6,000 |
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To Debtors A/c |
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6,000 |
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(Bad debts incurred) |
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(ii) |
Provision for Doubtful Debts A/c |
Dr |
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6,000 |
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To Bad Debts A/c |
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6,000 |
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(Bad debts adjusted) |
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(iii) |
Revaluation A/c (WN 1) |
Dr. |
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1,500 |
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To Provision for Doubtful Debts A/c |
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1,500 |
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(Provision created) |
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(iv) |
Ashok’s Capital A/c |
Dr. |
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900 |
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Bhaskar’s Capital A/c |
Dr. |
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600 |
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To Revaluation A/c |
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1,500 |
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(Loss on revaluation transferred to Partners’ Capital A/c) |
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Working Notes:
WN1: Calculation of Provision for Doubtful Debts
Provision to be created = (76,000 - 6,000)×5/100=
₹ 3,500
Old Provision = ₹ 2,000
New Provision to be created = 3,500 - 2,000 = 1,500
Question 48:
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.
(iv) Furniture (Book Value 50,000) is to be reduced by 40%.
(v) Furniture (Book Value 50,000) is to be reduced to 40%.
Answer:
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Journal |
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Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
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(i) |
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a. |
Revaluation A/c |
Dr. |
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16,000 |
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To Machinery A/c |
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16,000 |
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(Being Machinery be reduced) |
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b. |
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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(Being Building be appreciated) |
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(ii) |
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Revaluation A/c |
Dr. |
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4,000 |
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To Provision for Doubtful Debts A/c |
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4,000 |
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(Being provision be created for Doubtful Debts @ 5% of Debtors amounting to 80,000) |
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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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(Being Provision for warranty claims be increased) |
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(iv) |
Revaluation A/c |
Dr. |
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20,000 |
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To Furniture A/c |
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20,000 |
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(Being Furniture (Book Value 50,000) is to be reduced by 40%) |
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(v) |
Revaluation A/c |
Dr. |
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30,000 |
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To Furniture A/c |
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30,000 |
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(Being Furniture (Book Value 50,000) is to be reduced to 40%) |
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Question 49:
At
the time of admission of a partner Suresh, assets and liabilities of Ramesh
and Naresh were revalued as follows:
(a) A Provision for Doubtful Debts @10% was made on Sundry Debtors (Sundry
Debtors ₹ 50,000).
(b) Creditors were written back by ₹5,000.
(c) Building was appreciated by 20% (Book Value of Building ₹2,00,000).
(d) Unrecorded Investments were valued at ₹15,000.
(e) A Provision of ₹2,000 was made for an Outstanding Bill for repairs.
(f) Unrecorded Liability towards suppliers was ₹3,000.
Pass necessary Journal entries.
Answer:
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Journal |
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Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
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(i) |
Revaluation A/c |
Dr. |
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10,000 |
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To Provision for Doubtful Debts A/c |
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5,000 |
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To Reserve for outstanding Repairs Bill A/c |
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2,000 |
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To Creditors A/c |
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3,000 |
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(Increase in liabilities, decrease in assets and creation of reserves and provisions transferred to Revaluation Account) |
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(ii) |
Creditors A/c Dr. |
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5,000 |
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Building A/c Dr. |
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40,000 |
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Investments A/c Dr. |
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15,000 |
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To Revaluation A/c |
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60,000 |
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(Increase
in assets and decrease in liabilities |
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Revaluation A/c |
Dr. |
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50,000 |
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To Old Partners’ Capital A/c |
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50,000 |
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(Profit on Revaluation transferred to Partners’ Capital) |
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Question 50:
Om and Shiv are partners in a firm sharing profits equally.
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BALANCE SHEET (Extract) |
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Liabilities |
₹ |
Assets |
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₹ |
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Debtors Less: Provision for Doubtful Debts |
1,50,000 15,000 |
1,35,000 |
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An amount of ₹12,000 due from Mohan, a debtor, is to be written off as no longer receivable. Provision for Doubtful Debts on remaining debtors is to be maintained at the current rate.
What amount of Provision for Doubtful Debts should be credited to maintain its current rate?
Answer:
Current rate Provision for Doubtful debts is 15,000×100/1,50,000=10%
|
Debtors |
= |
1,50,000 |
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Less: Bad Debts |
= |
12,000 |
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Debtors After Bad Debts |
= |
1,38,000 |
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Provision for Doubtful Debts @10% is to be maintained |
= |
13,800 |
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Firm already has Provision of 15,000 |
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Provision for Doubtful Debts Before Adjustment of Bad Debts |
= |
15,000 |
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Less: Bad Debts |
= |
12,000 |
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Balance of Provision for Doubtful Debts after Adjustment of Bad Debts |
= |
3,000 |
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Amount of Provision for Doubtful Debts should be credited to maintain its current rate =13,800-3,000= 10,800 |
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Ts Grewal Solution 2026-2027
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Class 12 / Volume – I