To accurately reflect the machinery's value on the new Balance Sheet, an adjustment is required due to a 10% undervaluation. The procedure is as follows:
1. Current machinery valuation: ₹45,000.
2. Undervaluation percentage: 10%.
3. Calculation of the correct machinery valuation.
As the machinery was undervalued by 10%, the current value of ₹45,000 represents 90% of its actual worth. The true value (100%) is determined using the following calculation:
Calculation:
\(\text{Actual Value} = \frac{\text{Current Value}}{0.9} = \frac{45000}{0.9} = 50000\)
4. Consequently, the machinery will be recorded at ₹50,000 on the new Balance Sheet.
The correct valuation is therefore ₹50,000.