Question

If total assets are ₹ 12,00,000; total liabilities are ₹ 3,00,000; assets are realised at 70% and expenses on realisation are ₹ 10,000, what will be the profit or loss on realisation?

Answer 1

Assets realised = ₹ 12,00,000 × 70% = ₹ 8,40,000

Loss on assets = ₹ 12,00,000 − ₹ 8,40,000 = ₹ 3,60,000

Add: Realisation expenses = ₹ 10,000

Loss on Realisation = ₹ 3,60,000 + ₹ 10,000 = ₹ 3,70,000

Answer: Loss on Realisation = ₹ 3,70,000