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. ₹40,500
• C. ₹40,000
• D. ₹50,000

Answer 1

The Correct Option is D

To find the correct value of machinery for the new Balance Sheet, we need to adjust the current value as it has been undervalued by 10%. The steps are as follows: 

1. Identify the current value of the machinery: ₹45,000.

2. Determine the percentage by which it has been undervalued: 10%.

3. Calculate the true (correct) value of the machinery.

Since the machinery was undervalued by 10%, this means the ₹45,000 represents only 90% of the actual value. To find the true value (100%), we use the equation:

Also,:

\(\text{Actual Value} = \frac{\text{Current Value}}{0.9} = \frac{45000}{0.9} = 50000\)

4. Therefore, the machinery will appear in the new Balance Sheet at ₹50,000.

Hence, the correct option is ₹50,000.

Answer 2

When the machinery is undervalued by 10%, we need to adjust the value of the machinery to reflect its correct value.

Given:
- Current value of machinery = ₹ 45,000
- Undervaluation = 10%

To find the correct value, we need to add the 10% undervaluation to the current value:

Correct value of machinery = ₹ 45,000 × (1 + 10/100) = ₹ 45,000 × 1.10 = ₹ 50,000

Therefore, the value of the machinery will appear in the new Balance Sheet at ₹ 50,000.

The correct answer is: (4) ₹ 50,000