Question

Book value of machinery of M/S AB firm in balance sheet Rs.90000, whichis to be undervalued by 10% what is the amount of machinery to be transferred to new firmSelect the right answer from below options :     A )    100000     B )    81000     C )    99000     D )    91000​

Answer 1

Answer:

Book value of machinery of M/S AB firm in balance sheet Rs.90000, whichis to be undervalued by 10% what is the amount of machinery to be transferred to new firmSelect the right answer from below options :     A )    100000     B )    81000     C )    99000     D )    91000

option B

Answer 2

The amount of machinery to be transferred to the new firm is (B) 81000.

• The book value of machinery is 90000 and this value needs to be revalued(undervalued)at 10% less than the book value in the books of the new firm.
• Revaluation may be due to various reasons like the machine may have become obsolete.
• So in the books of the new firm the machinery is to be valued at 81000 that is 90000 * 90%.
• Hence the correct answer is option B