On admission of a partner, machinery was valued at ₹ 45,000 but was undervalued by 10%.
To find the correct value, we calculate the undervalued amount:
Undervaluation = 10% of ₹ 45,000
= 0.10×45,000=4,500
Now, add this to the original value:
Correct value = ₹ 45,000 + ₹ 4,500
= 45,000+4,500=49,500
However, the question asks for the value that will appear in the new Balance Sheet. Since the machinery was undervalued, we need to adjust it to its true value.
True value = ₹ 45,000 / (1 - 0.10)
= 45,000/0.90=50,000
So, the value of machinery will appear in the new Balance Sheet at:
₹ 50,000
Correct answer: Option 2.