Question

A and B are partners of a partnership firm sharing profits in the ratio of 3 : 2 respectively. C was admitted for a `1/5`th share of profit. Machinery is overvalued by 10% (book value of ₹ 1,32,000), and building is undervalued by 10% (book value of ₹ 5,40,000). Unrecorded debtors of ₹ 10,000 would be brought into the books. What will be the gain/loss on revaluation?

विकल्प

• Gain ₹ 50,800

• Loss ₹ 58,000

• Gain ₹ 58,000

• Loss ₹ 50,800

Answer 1

Gain ₹ 58,000

Explanation:

Dr.	REVALUATION ACCOUNT		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Machinery	12,000	By Building	60,000
To Gain on Revaluation transferred to Capital A/cs	58,000	By Debtors	10,000
	70,000		70,000

Actual Value of Machinery = `1,32,000 xx 100/110`

= 1,20,000

Difference in actual value and book value = 1,32,000 − 1,20,000

= 12,000

Actual Value of Building = `5,40,000 xx 100/90`

= 6,00,000

Difference in actual value and book value = 6,00,000 − 5,40,000

= 60,000