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Question
On reconstitution of a firm, the value of machinery was depreciated by ₹1,00,000 and investments increased to ₹70,000 from ₹20,000. Gain or loss on revaluation will be ______.
Options
Gain ₹ 50,000
Loss ₹ 50,000
Gain ₹ 1,50,000
Loss ₹ 1,50,000
Solution
On reconstitution of a firm, the value of machinery was depreciated by ₹1,00,000 and investments increased to ₹70,000 from ₹20,000. Gain or loss on revaluation will be loss ₹ 50,000.
Explanation:
| Dr. | Revaluation Account | Cr. | |
| Particulars | Amount (₹) | Particulars | Amount (₹) |
| To Depreciation on Machinery A/c | 1,00,000 | By Investments | 50,000 |
| By Loss on Revaluation | 50,000 | ||
| 1,00,000 | 1,00,000 | ||
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