BAA1253 – FINANCIAL ACCOUNTING 2 (BACHELOR)

Chapter 3 – Revaluation of Partnership Assets

1. Show journal entry to record an asset showing a gain on revaluation.

2. Show journal entry to record an asset showing a loss on revaluation.

3. Show journal entry to record an increase in the total valuation of assets.

4. Show journal entry to record a decrease in the total valuation of assets.

5. A, B and C have been in a partnership for five years, sharing profits and losses in
a ratio of 3:4:3 respectively. However, a decided to retire on 31 December 2018.

The assets of the partnership were:

Book Value New Value
RM RM
Freehold premises 1,500,000 1,700,000
Inventories 80,000 70,000
Accounts Receivable 85,000 60,000

A, B & C have RM10,000, RM20,000 and RM10,000 balance of Capital

respectively. After B retirement, A and C agreed to share the profits equally.

Required:
a) Prepare the Revaluation Account.
b) Prepare the Premises, inventories and receivable accounts
c) Prepare Capital accounts

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 BAA1253 – FINANCIAL ACCOUNTING 2 (BACHELOR)
Chapter 3 – Revaluation of Partnership Assets

6. Mike, Fred and Jessica have been in a partnership for six years, sharing profits
and losses in a ratio of 3:3:4 respectively. However, Jessica decided to retire on
31 December 2018.

The assets of the partnership were:

Book Value New Value
RM RM
Buildings 1,800,000 2,100,000
Machinery 65,000 50,000
Accounts Receivable 55,000 60,000

Capital (RM)
Mike 30,000
Fred 30,000
Jessica 50,000

After Jessica’s retirement, Mike and Fred agreed to share the profits equally.

Required:
d) Prepare the Revaluation Account.
e) Prepare the Buildings, Machinery and Receivable accounts
f) Prepare Capital accounts