Zainab, Chinedu, and Dele are partners in a firm sharing profits and losses in the ratio respectively. On 31st March 2026, they agreed to revalue the firm's assets and liabilities upon restructuring. The book values and revaluation terms are given below:
| Asset / Liability | Book Value (₦) | Agreed Revaluation Term |
|---|---|---|
| Freehold Premises | 450,000 | Revalued at ₦620,000 |
| Plant & Machinery | 300,000 | Reduced by 10% write-down |
| Motor Vehicles | 180,000 | Revalued downwards by 15% |
| Trade Debtors | 120,000 | Provision for doubtful debts created at 5% |
| Inventory | 95,000 | Revalued at ₦84,000 |
| Accounts Payable & Accruals | 80,000 | Discount of ₦2,000 expected from creditors; unrecorded accrued expense of ₦14,000 discovered |
What is the net amount, in Naira (₦), to be credited to Zainab's capital account as her share of the revaluation profit?
Cevap: 42000 ₦
Cevap
The net amount to be credited to Zainab's capital account is ₦42,000.
Total revaluation gains equal ₦172,000 (Premises appreciation of ₦170,000 + Creditors discount of ₦2,000). Total revaluation losses equal ₦88,000 (Plant write-down ₦30,000 + Motor vehicles loss ₦27,000 + Doubtful debts provision ₦6,000 + Inventory reduction ₦11,000 + Unrecorded liability ₦14,000). The net profit on revaluation is ₦172,000 - ₦88,000 = ₦84,000. Allocating this to Zainab using her ratio fraction of 5/10 yields ₦42,000 credited to her capital account.
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Anahtar Kavram
Partnership Revaluation Profit Distribution