Question

Arun and Vijay are partners in a firm sharing profits and losses in the ratio of 5:1.
Balance Sheet (Extract)
Liabilities
`
Assets
`
Machinery
40,000
If value of machinery in the balance sheet is undervalued by 20%, then at what value will machinery be shown in new balance sheet:
(a) ` 44,000 (b) `48,000 (c) `32,000 (d) `50,000

Answer 1

Answer:

Explanation:

Arun and Vijay are partners in a firm sharing profits and losses in the ratio of 5:1.

Balance Sheet (Extract)

Liabilities

Assets  

Machinery

40,000

If value of machinery in the balance sheet is undervalued by 20%, then

Assets :

Machinery : 40,000

Add: 40,000 × 20 /100 = 8000

Total = 48000