P, Q & R are partners of a partnership firm sharing profits in the ratio of 3:2:1. R retired from the firm on following terms. Machinery of OMR 60,000 to be depreciated by 10%. Building to be appreciated by OMR 5,000, Provision for doubtful debts to be made at 6% on sundry debtors, which amounted to OMR 40,000 and OMR 200 to, provided for an electricity bill. Compute revaluation profit or loss.

a.

Revaluation loss: A: 2150; B: 1440

b.

Revaluation loss: A: 1800; B: 1200; C: 600

c.

Revaluation Profit: A: 1800; B: 1200; C: 600

d.

Revaluation profit: A: 2160; B: 1440

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What is the demerit of partnership from the choices listed below?

a.

Limited life

b.

Combining of financial resources

c.

Flexibility in business operations

d.

No taxation at the partnership level