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Question
Arun and Vijay are partners in firm sharing profits and losses in the ratio of 5 : 1.
Balance Sheet (Extract) | |||
Liabilities | Amount (₹) | Assets | Amount (₹) |
Machinery | 40,000 |
If the value of machinery in the balance sheet is undervalued by 20%, then at what value will machinery be shown in a new balance sheet?
Options
₹ 44,000
₹ 48,000
₹ 32,000
₹ 50,000
MCQ
Solution
₹ 50,000
Explanation:
x - 20% of x = ₹ 40,000
= x - `1/5`x = ₹ 40,000
`= 4/5` x ₹ 40,000
x = ₹ `40,000 xx 5/4`
x = ₹ 50,000
therefore, the value of machinery is ₹ 50,000.
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Accounting for Revaluation of Assets and Reassessment of Liabilities
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