Question

Sujata and Laxmi were partners in a firm sharing profits and losses in the ratio of 2 : 1. On 1^st April, 2025, they admitted Raghu as a new partner for 1/5^th share in the profits of the firm. On the date of Raghu’s admission, it was found that the equipment is undervalued by ₹ 90,000. After revaluation, the Balance Sheet of Sujata, Laxmi and Raghu showed equipment at ₹ 3,00,000. The value of equipment shown in the books of the firm of Sujata and Laxmi before Raghu’s admission was:

Options

• ₹ 3,90,000

• ₹ 2,10,000

• ₹ 3,00,000

• ₹ 90,000

Answer 1

₹ 2,10,000

Explanation:

Let the original value of equipment in the books be ₹ x.

It is given that:

• Equipment was undervalued by ₹ 90,000
• After revaluation, equipment became ₹ 3,00,000

So,

x + 90,000 = 3,00,000

x = 3,00,000 − 90,000

x = 2,10,000