Ajay and Bharat are partners in a firm. Their profit sharing ratio is 3:2. They admitted Chetan for 25% share of profit. Building is to be depreciated by 20% (Book Value Rs. 50,000) and the machinery would be appreciated by 10% (Book Value Rs. 40,000), an unrecorded Debtor of Rs. 1000 would be brought into the firm's books. What was Bharat's share of revaluation profit/loss?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Loss Rs. 2000
The profit or loss on revaluation belongs to the old partners and is shared in their old ratio (3 : 2). The new partner takes no part in it, so Chetan’s 25% share is not used.
Building depreciated: 20% of Rs. 50,000 = Rs. 10,000 (loss)
Machinery appreciated: 10% of Rs. 40,000 = Rs. 4,000 (gain)
Unrecorded debtor brought in = Rs. 1,000 (gain)
Net result = Rs. 10,000 − (Rs. 4,000 + Rs. 1,000) = Rs. 5,000 (loss)
Bharat’s share = 2/5 × Rs. 5,000 = Rs. 2,000 (loss)
NCERT (2026-27 edition): |