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Question : A, B and C were partners, sharing profits and losses in the ratio of 2:2:1. B retired on 31st March 2020. On the date of his retirement, some of the assets and liabilities appeared in the books as follows:

Creditors Rs. 70,000; Building Rs. 1,00,000; Plant and Machinery Rs. 40,000; Stock of Raw Materials Rs. 20,000; Stock of Finished Goods Rs. 30,000, Debtors Rs.20,000.
Following was agreed among the partners on B's retirement:
(a)    Building to be appreciated by 20%.
(b)    Plant and Machinery to be reduced by 10%.
(c)    A Provision of 5% on Debtors to be created for Doubtful Debts.
(d)    Stock of Raw Materials to be valued at Rs. 18,000 and Finished Goods at Rs. 35,000.
(e)    An Old Computer previously written off was sold for Rs. 2,000 as scrap.
(f)    Firm had to pay Rs. 5,000 to an injured employee.

Question: Revaluation profit is 

Option 1: 20,000

Option 2: 17,000

Option 3: 15,000

Option 4: None of these


Team Careers360 6th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: 15,000


Solution : Answer = 15,000

Revaluation A/c

To Plant 4000 By Building 20,000
To Provisions for Doubtful Debt 1000 By Stock of Finished Goods 5000
To Stock of Firm Material 2000
To Bank 5000 By Bank 2000
To Profit 15,000
27000 27000

Hence, the correct option is 3.

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