If the necessary journal entries are required to be recorded, without opening Revaluation Account, which entries need to be passed and how to arrive at their amounts?
Dear Student
In case Revaluation A/c is not to be opened, then the gain/loss on revaluation is worked out through a statement.
If the net effect is +ve (profit), then the gaining partners compensate the sacrificing partners If the net effect is -ve (loss), then the sacrificing partners compensate the gaining partners. Similar is the case of accumulated profits/losses and reserves
Regards
In case Revaluation A/c is not to be opened, then the gain/loss on revaluation is worked out through a statement.
Statement of Computation of Gain/Loss on Revaluation without preparing Revaluation Account | |
Particulars | Amt |
Add : | |
Increase in Assets | xxx |
Decrease in Liabilities | xxx |
Less : | |
Decrease in Assets | xxx |
Increase in Liabilities | xxx |
Net amount (Gain/ (Loss)) | xxx |
If the net effect is +ve (profit), then the gaining partners compensate the sacrificing partners If the net effect is -ve (loss), then the sacrificing partners compensate the gaining partners. Similar is the case of accumulated profits/losses and reserves
Regards