X and Y are partners sharing profits in the ratio of 3 : 2. They admitted Z as a new partner for 1/4th share of profits. At the time of admission of Z 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.

X and Y are partners sharing profits in the ratio of 3 : 2. They admit

1.	X and Y are partners sharing profits in the ratio of 3 : 2. They admitted Z as a new partner for 1/4th share of profits. At the time of admission of Z 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» n: Journal Sr. No. PARTICULARS Debit Rs. Credit Rs. (i) Bad Debts A/c Dr. 6,000 To DEBTORS A/c 6,000 (Being bad debts incurred) (ii) PROVISION for doubtful debts A/c Dr. 6,000 To Bad Debts Ale 6,000 (Being bad debts adjusted) (iii) Revaluation A/c Dr. 1,500 To Provision for doubtful debts A/c 1,500 (Being provision created)(IV) X's Capital A/c Dr. 900 Y's Capital A/c Dr. 600 To Revaluation A/c 1,500 (Being loss on revaluation transferred to partners' capital A/c) Working Notes:1. Calculation of provision for Doubtful Debts Provision to be created = (76,000- 6,000)x = 3,500 Old Provision = 2, 000 New Provision (to be created)= 3,500 - 2,000 = 1,500

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