Gagan from Punjab and Abhiraj from Rajasthan started a business in partnership 3 years back. They share profits in the ratio of 3:2. With a view to Expand their business they decided to admit a new partner Akshit from Delhi for 1/4th share in future profits which he acquires equally from Gagan and Abhiraj. At the time of admission, the Balance Sheet stood as follows: | ||||||||||||||||||||||||||||||||||||||||||||
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Akshit bring Rs.4,75,000 as his capital and Rs.25,000 as his share of goodwill. Following adjustments to be considered: | ||||||||||||||||||||||||||||||||||||||||||||
(i) Land and Building was overvalued by 10 %. Motor Car is to be reduced by 15 %. Machinery to be appreciated by 20%. | ||||||||||||||||||||||||||||||||||||||||||||
(ii) Stock includes an obsolete item of Rs.3,000 to be written off. Investment revalued at Rs.90,000 and Creditors Rs.8,000 not likely to be paid. | ||||||||||||||||||||||||||||||||||||||||||||
(iii) Bad debts of Rs.1,000 to be written off. Provision to be created on debtor for 5%. | ||||||||||||||||||||||||||||||||||||||||||||
(iv) There was a claim of Rs.2,00,000 against the workmen compensation reserve out of which Claim of Rs.1,65,000 accepted by the firm. | ||||||||||||||||||||||||||||||||||||||||||||
Amount of Land and Building to be shown in Revaluation Account: |
A) Credit side of Revaluation Account Rs.33,000
B) Credit side of Revaluation Account Rs.30,000
C) Debit side of Revaluation Account Rs.33,000
D) Debit side of Revaluation Account Rs.30,000
Correct Answer: D
Solution :
Debit side of Revaluation Account Rs.30,000You need to login to perform this action.
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