Read the following passage and answer the following question.
A, B & C are partners sharing profits in proportion to their capital. A retired from the firm on 1st April 2021 and the remaining partners decided to carry on the partnership with a profit-sharing ratio of 4:3. At the time of retirement, their capital accounts show balance- A- ₹2,00,000, B- ₹3,00,000, and C ₹2,00,000. The assets and liabilities of the partnership firm are as follows-
Creditors- ₹50,000
General reserve- ₹35,000
Workmen Compensation fund ₹15,000
Cash balance- ₹1,00,000
Stock- ₹1,00,000
Machinery- ₹3,00,000
Land- ₹2,00,000
Debtors after provision for doubtful debts (10,000)= ₹1,00,000
On the retirement, land is revalued at 123%. Calculate the revised value of land.
Answer & explanation
Correct answer: option 2
The correct answer is option 2- ₹2,46,000.
Old value = ₹2,00,000
Revised value is 123%
Old value is 100%
So revised value = 2,00,000 x 123/100
= 2,46,000