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Partnership unit 2
Accountancy
In illustration 1 we found realisation profit by crediting excess amount and debiting deficit amount taken And then less provision realisation profit came . But in practice problem 1 they did it by calculating pc and and transfer it to realisation and found profit . But when I did practice problem in illustration 1 model revaluation profit answer is not matching with book . Please any one reply
Answers (6)
ruchi lahoti
In realization a/c the values of assets are taken at book value. In the 1st illustration the Journal entries are made at agreed values In the practice question the assets are transfered to realization at their book values. Hence, the difference
Can you please elaborate still I can't understand . In any method the realisation profit should be same na In illustration 1 they took the excess or deficit over book value to realisation alc In practice prob 1 they took book values to realisation alc and in pc the excess or deficit will be automatically adjusted. So why will difference comes in both methods ??
Thread Starter
Enuguru Sai NithinPlease take a look
The difference is because of Goodwill which is dealt in separate working note in each problem. Once you do the entire sum in earlier method, the final balance sheet will be same. The same note is also given at the end of practice problem.
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