ANSWER:

Following are the journal entries of the above transactions-

1. Revaluation a/c dr. 2,000

to stock a/c. 2,000

(being value of stock decreases)

2. Revaluation a/c. dr. 2,300

to outstanding bill a/c 2,300

(being unrecorded liability now recorded)

3. Investment a/c dr. 70,000

to revaluation a/c 70,000

(being unrecorded asset now recorded)

4. Revaluation a/c dr. 65,700

to old partner's capital a/c 65,700

(being profit on revaluation distributed among old partners in old ratio)

Explanation -

1. here stock is reduced by 2000rs. when revalued. therefore, it is a loss for the firm, hence recorded in the dr. side of revaluation a/c.

2. there is an unrecorded liability hence it is a loss for the firm and the liability is increasing so it is debited to revaluation a/c.

3. there is an investment of ₹70,000 which is to be recorded. so we treat it as an unrecorded asset. therefore the amount of asset is increasing, hence it will be credited to revaluation a/c as it is a gain for the firm.

hope it will help you.