Dinesh, Ramesh and Suresh are partners in a firm sharing profits and losses in the ratio of 3:3:2. They decided to share the profits equally w.e.f. April 1, 2025. On that date, sundry debtors of Rs. 60,000 and stock of Rs. 1,20,000 appeared in the balance sheet. A provision of 5% on sundry debtors be made for doubtful debts. The value of stock be reduced to Rs. 1,12,000. The gain or loss on revaluation would be:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Loss on Revaluation Rs. 11,000
On a change in the profit sharing ratio, assets and liabilities are revalued and the result goes to a Revaluation Account. A new provision for doubtful debts and a fall in the value of stock both reduce the value of assets, so each is a loss.
Provision for doubtful debts = 5% of Rs. 60,000 = Rs. 3,000 (loss)
Reduction in stock = Rs. 1,20,000 − Rs. 1,12,000 = Rs. 8,000 (loss)
Net result = Rs. 3,000 + Rs. 8,000 = Loss on Revaluation Rs. 11,000
In the book’s illustration the fixed assets are also revalued upwards; the question leaves that item out, so only these two losses count here.
Note: This question is from NCERT (2026-27). NTA sets numerical questions from NCERT too, so do not ignore NCERT while practising numericals.
NCERT (2026-27 edition):
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