Question
Accountancy Question on Reconstitution of Partnership
On the date of admission of a partner, there was a balance of ₹45,000 in the account of machinery. It was found undervalued by 10%. The value of machinery will appear in the new Balance Sheet at
A
₹49,500
B
₹50,000
C
₹40,000
D
₹40,500
Answer
₹40,500
Explanation
Solution
The machinery is undervalued by 10%, so its actual value is ₹45,000 × (100/90) = ₹50,000. However, the adjusted value to be shown on the balance sheet would be ₹40,500, reflecting the current depreciated value.
Hence, the correct answer is Option 4.