Arun and Vijay are partners in a firm sharing profits and losses in the ratio of 5:1.
Balance Sheet (Extract)
| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
| Machinery | 40,000 |
If the value of machinery reflected in the balance sheet is overvalued by 33 `1/3`%, find out the value of Machinery to be shown in the new Balance Sheet:
(A) ₹ 44,000
(B) ₹48,000
(C) ₹ 32,000
(D) ₹30,000
(D) ₹30,000
Explanation:
Machinery is overvalued Value by 33 `1/3`% of 40,000
Here, 33 `1/3`% as a fraction
= `\frac{33\frac{1}{3}}{100}`
Converting the mixed fraction to an improper fraction, we get
= `\frac{\frac{100}{3}}{100}`
= `100/300`
Simplifying this, we get
= `100/300` = `1/3`
= `100/300` of z = 40,000-z
Because, 40,000 is overvalued Value, we will minus the real value from 40,000.
= `"100x"/"300"` + `"300z"/"300"` = 40,000
= `"400z"/"300"` = 40,000
= 40,000 `\times` `300/400` = z
∴ z = 30,000
Simplifying this, we get
= `100/300` = `1/3`
= `100/300` of z = 40,000-z
Because, 40,000 is overvalued Value, we will minus the real value from 40,000.
= `"100x"/"300"` + `"300z"/"300"` = 40,000
= `"400z"/"300"` = 40,000
= 40,000 `\times` `300/400` = z
∴ z = 30,000