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Reassessment of Liabilities

Suhani and So...

Question

Suhani and Sonia who share profits in the ratio of 3:2 with capitals of Rs 30,000 & Rs 20,000 respectively. On that date, Keshav is admitted into the partnership. Keshav is to bring in Rs. 10,000 as capital and Rs. 5,000 as a premium for goodwill for 1/6 share. Furniture having book value of Rs 10,000 is revalued at Rs. 15,000 & Investment worth Rs. 5,000 (not mentioned on the balance sheet) is to be taken into account. A creditor of Rs. 2,000 is not likely to claim his money and is to be written off. What is the revaluation profit /loss?

None of the above

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Rs 7,000

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Rs 12,000

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Rs 5,000

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Solution

The correct option is C
Rs 12,000

Increase in value of furniture = Rs 5,000

Investment = Rs 5,000

Amount written off(Payable to creditor) = Rs 2,000

Total Revaluation profit = Rs 12,000

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The correct option is C Rs 12,000 Increase in value of furniture = Rs 5,000 Investment = Rs 5,000 Amount written off(Payable to creditor) = Rs 2,000 Total Revaluation profit = Rs 12,000

The correct option is C
Rs 12,000

Increase in value of furniture = Rs 5,000

Investment = Rs 5,000

Amount written off(Payable to creditor) = Rs 2,000

Total Revaluation profit = Rs 12,000