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Question
At the time of dissolution of a firm, the total assets were ₹ 6,00,000 and outside liabilities were ₹ 2,40,000. If assets realised ₹ 7,20,000 and realisation expenses of ₹ 8,000 were paid, the profit or loss on realisation will be:
Options
Loss ₹ 1,20,000
Profit ₹ 1,20,000
Loss ₹ 1,12,000
Profit ₹ 1,12,000
MCQ
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Solution
Profit ₹ 1,12,000
Explanation:
Total assets = ₹ 6,00,000
Realization expenses = ₹ 8,000
Total cost = ₹ 6,00,000 + ₹ 8,000
= ₹ 6,08,000
Assets realized = ₹ 7,20,000
Profit or Loss = Assets realized – Total cost
= ₹ 7,20,000 – ₹ 6,08,000
= ₹ 1,12,000
∴ The profit on realization is ₹ 1,12,000.
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