Q16. An extract of Balance Sheet as on 31 March 2023
Liabilities
Provision for legal damages: ₹4,800

Q: What is the correct answer for CUET UG Accountancy Q16?

The correct answer is B. Calculations:1. Premises under-valued by 15%:Book Value = 85,000. If it's under-valued by 15%, then 85% of its actual value is 85,000.Actual Value = 85,000 / (1 - 0.15) = 85,000 / 0.85 = 100,000 (This is an alternative interpretation, if 85,000 represents 85% of the true value. The solution's approach is: 'Premises found under-valued by 15% which means the actual value must have been higher than t

Q: Q16. An extract of Balance Sheet as on 31 March 2023 Liabilities Provision for legal damages: ₹4,800 Assets Furniture: ₹41,000 Premises: ₹85,000 Additional Information: Premises found under-valued by…

The correct answer is B. Calculations:1. Premises under-valued by 15%:Book Value = 85,000. If it's under-valued by 15%, then 85% of its actual value is 85,000.Actual Value = 85,000 / (1 - 0.15) = 85,000 / 0.85 = 100,000 (This is an alternative interpretation, if 85,000 represents 85% of the true value. The solution's approach is: 'Premises found under-valued by 15% which means the actual value must have been higher than t

Q: What are the options for this CUET UG Accountancy question?

A. Revaluation A/c Dr 16,500To Premises A/c 15,000To Provision for legal damages A/c ₹1,500 · B. Premises A/c Dr ₹15,000To Revaluation A/c ₹15,000Revaluation A/c Dr 1,200To Provision for legal damages A/c 1,200 · C. Premises A/c Dr ₹15000To Revaluation A/c ₹15000Provision for legal damages A/c Dr. ₹1,200To Revaluation A/c 1,200 · D. Premises A/c Dr 12,750To Revaluation A/c 12,750Revaluation A/c Dr 1,200To provision for legal damages A/c 1,200

Question

Q16. An extract of Balance Sheet as on 31 March 2023
Liabilities
Provision for legal damages: ₹4,800
Assets
Furniture: ₹41,000
Premises: ₹85,000
Additional Information:
Premises found under-valued by 15% and provision for legal damages to be created upto ₹6,000.
On the basis of above information pass journal entry at the time of reconstitution of firm.
(a) Revaluation A/c Dr 16,500
To Premises A/c 15,000
To Provision for legal damages A/c ₹1,500
(b) Premises A/c Dr ₹15,000
To Revaluation A/c ₹15,000
Revaluation A/c Dr 1,200
To Provision for legal damages A/c 1,200
(c) Premises A/c Dr ₹15000
To Revaluation A/c ₹15,000
Provision for legal damages A/c Dr. ₹1,200
To Revaluation A/c 1,200
(d) Premises A/c Dr 12,750
To Revaluation A/c 12,750
Revaluation A/c Dr 1,200
To provision for legal damages A/c 1,200

FirstInTest · Accepted Answer

Calculations:1. Premises under-valued by 15%:Book Value = 85,000. If it's under-valued by 15%, then 85% of its actual value is 85,000.Actual Value = 85,000 / (1 - 0.15) = 85,000 / 0.85 = 100,000 (This is an alternative interpretation, if 85,000 represents 85% of the true value. The solution's approach is: 'Premises found under-valued by 15% which means the actual value must have been higher than the book value. Increase in Value of Premises = 85,000 * (15/85) = 15,000'. This implies 85,000 is 85% of the real value. So, the increase is 15/85th of 85,000, which is 15,000).Increase in Premises = 15,000 (An asset increase is credited to Revaluation A/c).Journal Entry for Premises: Premises A/c Dr 15,000; To Revaluation A/c 15,000.2. Provision for legal damages to be created up to ₹6,000:Existing Provision = 4,800.Required Provision = 6,000.Increase in Provision = 6,000 - 4,800 = 1,200 (An increase in liability is debited to Revaluation A/c).Journal Entry for Provision: Revaluation A/c Dr 1,200; To Provision for legal damages A/c 1,200.Combining the entries, option (b) correctly represents these adjustments.

Answer

Revaluation A/c Dr 16,500To Premises A/c 15,000To Provision for legal damages A/c ₹1,500

Answer

Premises A/c Dr ₹15,000To Revaluation A/c ₹15,000Revaluation A/c Dr 1,200To Provision for legal damages A/c 1,200

Answer

Premises A/c Dr ₹15000To Revaluation A/c ₹15000Provision for legal damages A/c Dr. ₹1,200To Revaluation A/c 1,200

Answer

Premises A/c Dr 12,750To Revaluation A/c 12,750Revaluation A/c Dr 1,200To provision for legal damages A/c 1,200

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