Question

Onkar, Nitisha and Sheetal were partners sharing profits in the ratio of 3:1:1. They decided to admit Raman as a partner. On revaluation of assets, it was found that Machinery is overvalued by 25% (Book value of machinery was 6,25,000). This implies:

Answer 1

Answer:

Revaluation A/c Dr. 1,25,000

To Machinery A/c 1,25,000

(Being settlement of Partners loan)

Onkar’s Capital A/c Dr. 75,000

Nitisha’s Capital A/c Dr. 25,000

Sheetal’s Capital A/c Dr. 25,000

To Revaluation A/c 1,25,000

(Beng loss of revaluation distributed)

Answer 2

Answer:

this implies that:-

-if machinary overvalued by 25% thts mean increase in asset ....

and increase in value of asset leads to increased in profit and reduce the loss

and

similarly

decrease in value of asset leads to loss