# Arun and Vijay Are Partners In A Firm Sharing Profits And Losses In The Ratio of 5:1, Machinery Reflected In The Balance Sheet Is Overvalued - Bzziii.com

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 Amou
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