A and B are partners of a partnership firm sharing profits in the ratio of 3 : 2 respectively. C was admitted for 1/5th share of profit. Machinery would be appreciated by 10% (book value ₹80,000) and building would be depreciated by 20% (₹2,00,000). Unrecorded debtors of ₹1,250 would be brought into books now and a creditor amounting to ₹2,750 died and need not pay anything on this account. What will be profit/loss on revaluation?
Answer & explanation
Correct answer: option 1
The correct answer is option 1- Loss of ₹28,000.
Revaluation A/c
| Particulars | Amount (₹) |
particulars | Amount (₹) |
| To Building (2,00,000 x 20/100) | 40,000 | By Machinery (80,000 x 10/100) | 8,000 |
| By Debtors | 1,250 | ||
| By Creditors | 2,750 | ||
| By loss on revaluation (balancing figure) | 28,000 | ||
| 40,000 | 40,000 |