Comprehension Passage
Given below is the Balance Sheet of A and B, who are carrying on partnership business as on March 31, 2017. A and B share profits in the ratio of 2:1.
Balance Sheet of A and B as at March 31, 2017
| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
|---|---|---|---|
| Bills Payable | 10,000 | Cash in hand | 10,000 |
| Sundry Creditors | 58,000 | Cast at bank | 40,000 |
| Outstanding Expenses | 2,000 | Sundry Debtors | 60,000 |
| Capitals: | Stock | 40,000 | |
| A – 1,80,000 | Plant and Machinery | 1,00,000 | |
| B – 1,50,000 | 3,30,000 | Building | 1,50,000 |
| Total | 4,00,000 | Total | 4,00,000 |
C is admitted as a partner on the date of the balance sheet on the following terms:
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C will bring in Rs. 1,00,000 as his capital and Rs. 60,000 as his share of goodwill for 1/4 share in profits.
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Plant is to be appreciated to Rs. 1,20,000 and the value of buildings is to be appreciated by 10%.
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Stock is found overvalued by Rs. 4,000.
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A provision for doubtful debts is to be created at 5% of debtors.
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Creditors were unrecorded to the extent of Rs. 1,000.
By how much amount will the building be appreciated?
1
Rs. 10,000
2
Rs. 15,000
3
Rs. 5,000
4
Rs. 12,000