Question

Nita, Vidur and Mita were partners in a firm sharing profits and losses in the ratio of 3 : 4 : 1. On 1st April 2024, they decided to admit Samir as a new partner. The new profit sharing ratio between Nita, Vidur, Mita and Samir will now be 1 : 1 : 1 : 1. The balance sheet of Nita, Vidur and Mita before Samir’s admission showed machinery at ₹ 6,00,000. On the date of admission, it was found that the machinery is overvalued by 20%. The value of machinery shown in the new Balance Sheet after Samir’s admission will be :

• A. ₹ 7,50,000
• B. ₹ 4,80,000
• C. ₹ 7,20,000
• D. ₹ 5,00,000

Hint:

When admitting a new partner, always adjust asset values to their fair market value before preparing the new balance sheet.

Answer 1

The Correct Option is B

Step 1: Find the overvaluation amount.
\[ \text{Overvaluation} = 20% \text{ of } ₹ 6,00,000 = ₹ 1,20,000 \] Step 2: Reduce the machinery to its fair value.
\[ \text{Correct Machinery Value} = ₹ 6,00,000 - ₹ 1,20,000 = ₹ 4,80,000 \] Final Answer: ₹ 4,80,000