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 was undervalued by ₹90,000. After revaluation, the Balance Sheet of Sujata, Laxmi and Raghu showed equipment at ₹3,00,000.
Find the value of equipment shown in the books before Raghu's admission.
Options:
Undervaluation means the asset was recorded at a lower value than its actual value. Therefore, during revaluation, the asset value is increased by the amount of undervaluation.
Given:
Original Value of Equipment:
= Revalued Value − Increase in Value
= ₹3,00,000 − ₹90,000
= ₹2,10,000
Hence, the value of equipment before Raghu's admission was ₹2,10,000.
Answer: Option (B) ₹2,10,000