Question:medium
Sujata and Laxmi were partners in a firm sharing profits and losses in the ratio of 2 : 1. On 1st April, 2025, they admitted Raghu as a new partner for 1/5th share in the profits of the firm. On the date of Raghu’s admission, it was found that the equipment is undervalued by ₹ 90,000. After revaluation, the Balance Sheet of Sujata, Laxmi and Raghu showed equipment at ₹ 3,00,000. The value of equipment shown in the books of the firm of Sujata and Laxmi before Raghu’s admission was :
Sujata and Laxmi were partners in a firm sharing profits and losses in the ratio of 2 : 1. On 1st April, 2025, they admitted Raghu as a new partner for 1/5th share in the profits of the firm. On the date of Raghu’s admission, it was found that the equipment is undervalued by ₹ 90,000. After revaluation, the Balance Sheet of Sujata, Laxmi and Raghu showed equipment at ₹ 3,00,000. The value of equipment shown in the books of the firm of Sujata and Laxmi before Raghu’s admission was :
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When an asset is undervalued: Revalued Value = Book Value + Amount of Undervaluation
When an asset is overvalued: Revalued Value = Book Value - Amount of Overvaluation
In partnership admission, revaluation account is prepared to adjust the values of assets and liabilities to their current market values.
When an asset is overvalued: Revalued Value = Book Value - Amount of Overvaluation
In partnership admission, revaluation account is prepared to adjust the values of assets and liabilities to their current market values.
Updated On: Mar 9, 2026
- ₹ 3,90,000
- ₹ 2,10,000
- ₹ 3,00,000
- ₹ 90,000
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The Correct Option is B
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