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