Page 10 - L N (change in psr)

Treatment of reserves, accumulated profits and losses when nothing is

mentioned in the question: Journal Entries to be passed for the
mentioned transactions are as follows:

A For distributing reserves and accumulated profits:

General Reserves A/c …Dr.

Profit and Loss A/c …Dr.

Workmen Compensation Reserves A/c* …Dr.

Investment Fluctuation Reserve A/c** …Dr.

To All Partners’ Capital A/c (In old profit sharing ratio)

*Amount of workmen compensation reserve distributed shall be excess of

reserves over liability.

**Amount of investment fluctuation reserve distributed shall be excess of reserve

over difference between Book Value and Market Value.

B. For writing off accumulated losses:

All Partners’ Capital A/c …Dr. (In old profit sharing ratio)

To Profit and Loss A/c

Accounting Treatment for revaluation of assets and reassessment of

liabilities:

Accounting entries to record the Revaluation of Assets and Reassessment of
Liabilities:

i. Increase in the value of an asset:

Asset A/c (Individually) …Dr.