Question

Balance Sheet of A, B & C as on 31st March, 2025

Liabilities	Amount (Rs)	Assets	Amount (Rs)
Creditors	11,000	Buildings	20,000
Reserve Fund	6,000	Machinery	30,000
A Capital 30,000 B Capital 25,000 C Capital 15,000	70,000	Stock	10,000
		Patents	11,000
		Debtors	8,000
		Cash	8,000
	87,000		87,000

C retires and following revaluations took place.
Patents be valued at Rs.8,000; Machinery at Rs.28,000; and Buildings at Rs.25,000.
Find Revaluation Profit/Loss

• A. Revaluation profit Rs 10,000
• B. Revaluation Loss Rs 10,000
• C. Revaluation profit Rs 4,000
• D. No Profit, No Loss on Revaluation

Hint:

Patents fall by 3,000 and machinery falls by 2,000. Buildings rise by 5,000. Compare the totals.

Answer 1

The Correct Option is D

Step 1: Picture the Revaluation Account.
Losses go on the debit side and gains on the credit side. The balance of the account shows profit or loss.

Step 2: Fill the debit side.
Decrease in Patents is $11{,}000 - 8{,}000 = 3{,}000$. Decrease in Machinery is $30{,}000 - 28{,}000 = 2{,}000$. Debit side total is $3{,}000 + 2{,}000 = 5{,}000$.

Step 3: Fill the credit side.
Increase in Buildings is $25{,}000 - 20{,}000 = 5{,}000$. Credit side total is Rs 5,000.

Step 4: Find the balance.
Both sides are equal at Rs 5,000. So the account balances by itself with nothing left to transfer to the partners' capital accounts.

Step 5: Conclude.
The revaluation gives no profit and no loss.
\[ \boxed{\text{No profit, no loss}} \]

Final Answer:
The revaluation has no profit and no loss.