stock is undervalued by 10% the amount of stock is 18000.

How come in revaluation its written 2000 ?

it will be 1800 rs only . check your question once again maybe some other amt may be given.
  • -10
The stock is undervalued by 10% implies that the value recorded in the book is (100-10)% (i.e). 90%

Let the value of stock be Rs.x
90% of x= 18000
0.9*x= 18000
x=180000/9= Rs. 20000

So, the original value of stock is Rs 20000
The value of stock has to be raised by Rs.2000

The following entry will be passed:

Stock A/C Dr. 2000
To Revaluation A/C. 2000
  • 14
It is said that stock is undervalued by 10%, which means that its current book value is at (100-10)% = 90%.
Now, let the value of stock be x, and 90% of x = 18,000
Then, x = (18,000*100)/90
             = 20,000
Now actual value of stock(i.e., 100%) = 20,000
The value of stock is undervalued by 10% i.e.,it is to be raised by 10%
10% of 20,000 is 2,000
So, the entry passed will be:
  Stock A/c  Dr.      2,000
       To Revaluation A/c      2,000

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  • 82
18000
  • -7
This is the answer

  • 7
Stock us valued rs 18000 and it us undervalues by 90,% it means the stick is showing 90%amount which us 18000 So stick 18000=90%amount ? =100% We have to ro cross multiplication 18000*100/90=20000 It means the undervalued rs 2000 which is 20000-18000
  • 3
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