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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 would be appreciated by 10% (book value ₹ 80,000) and the building would be depreciated by 20% (₹ 2,00,000). Unrecorded debtors of ₹ 1,250 would be brought into books now and a creditor amounting to ₹ 2,750 died and need not pay anything on this account. What will be the profit/loss on revaluation?
Options
Loss ₹ 28,000
Loss ₹ 40,000
Profits ₹ 28,000
Profits ₹ 40,000
MCQ
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Solution
Loss ₹ 28,000
Explanation:
| Dr. | Revaluation Account | Cr. | |||
| Particulars | Amount (₹) | Amount (₹) | Particulars | Amount (₹) | Amount (₹) |
| Building Depreciation 20% | 40,000 | Machinery Appreciation 10% | 8,000 | ||
| Unrecorded Debtors | 1,250 | ||||
| Deceased Creditor | 2,750 | ||||
| To Loss on Revaluation transferred to: | 28,000 | ||||
| A’s Capital A/c | 16,800 | ||||
| B’s Capital A/c | 11,200 | ||||
| 40,000 | 40,000 | ||||
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