Read the following passage and answer the following question.

A, B & C are partners sharing profits and losses in the ratio of 2:2:1. B decided to retire on 31st March 2021. On the date of retirement, some of the assets and liabilities appeared in the books as follows-

Creditors- ₹70,000
Building- ₹1,00,000
Machinery- ₹40,000
Stock of raw material- ₹20,000
Stock of finished goods- ₹30,000
Debtors- ₹20,000

On the date of retirement, the building is to be appreciated by 20%. What will be the value of the building after appreciation?

₹1,20,000

The correct answer is option 3- ₹1,20,000.

Building = ₹1,00,000
Appreciation = 20% 
So, appreciation = 1,00,000*20/100
                           = ₹20,000

So the current value = 1,00,000 + 20,000
                                 = ₹1,20,000