Question

42. Arun and Vijay are partners in a firm sharing profit & loss in the ratio of 3: 2.

BALANCE SHEET (Extract)
Liabilities = ₹ 0
Assets = Machinery ₹ 2,00,000
If the value of machinery in the Balance Sheet is excess by 100/3%, find the value of machinery to be shown in the New Balance Sheet.
[Ans.: 1,50,000.)

Answer 1

₹ 1,50,000

Explanation:

You want to know the value of machinery to be shown if the value ₹ 2,00,000 is (100/3)% too high.

Value

The value shown (₹ 2,00,000) is (100/3)% more than the actual value, so the relation is ...

₹ 2,00,000 = actual value + (100/3)% × actual value

₹ 2,00,000 = actual value · (1 +1/3)

Multiplying by 1/(1 +1/3), we have ...

actual value = (3/4)·(₹ 2,00,000) = ₹ 1,50,000

The value of machinery to be shown in the New Balance Sheet is ₹1,50,000.

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Additional comment

(100/3)% = (100/3)/100 = 1/3

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