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Question
On the reconstitution of a firm, the value of the land was appreciated by ₹ 2,00,000 and plant and machinery reduced to ₹ 7,00,000 from ₹ 10,00,000. Gain or loss on revaluation will be ______.
Options
Gain ₹ 1,00,000
Loss ₹ 1,00,000
Loss ₹ 5,00,000
Gain ₹ 5,00,000
Solution
On the reconstitution of a firm, the value of the land was appreciated by ₹ 2,00,000 and plant and machinery reduced to ₹ 7,00,000 from ₹ 10,00,000. Gain or loss on revaluation will be loss ₹ 1,00,000.
Explanation:
| Dr. | Revaluation Account | Cr. | |
| Particulars | Amount (₹) | Particulars | Amount (₹) |
| To Plant & Machinery A/c | 3,00,000 | By Land and Building A/c | 2,00,000 |
| By Loss on Revaluation | 1,00,000 | ||
| 3,00,0000 | 3,00,000 | ||
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