Question

On the date of admission of a partner, there was a balance of ₹45,000 in the account of machinery. It was found undervalued by 10%. The value of machinery will appear in the new Balance Sheet at

• A. ₹49,500
• B. ₹50,000
• C. ₹40,000
• D. ₹40,500

Answer 1

The Correct Option is D

The machinery is undervalued by 10%, so its actual value is ₹45,000 × (100/90) = ₹50,000. However, the adjusted value to be shown on the balance sheet would be ₹40,500, reflecting the current depreciated value.
Hence, the correct answer is Option 4.