Question

Building was appearing in the books at ₹ 20,00,000 which was overvalued by 25%. What amount will be shown in the Balance Sheet of a reconstituted firm for building?

विकल्प

• ₹ 25,00,000

• ₹ 16,00,000

• ₹ 24,00,000

• ₹ 15,00,000

Answer 1

₹ 16,00,000

Explanation:

The building is overvalued by 25%, so we must first find its correct (true) value.

Let the TRUE value be = X

20,00,000 = X + 25% of X = 1.25X

`X = (20,00,000)/1.5`

= 16,00,000