Question

On dissolution of a firm, firm’s Balance Sheet total is ₹ 77,000. On the assets side of the Balance Sheet items were shown preliminary expenses ₹ 2,000; Profit & Loss Account (Debit) Balance ₹ 4,000 and Cash Balance ₹ 1,800. Loss on realisation was ₹ 6,300. Total assets (including cash balance) realised will be:

Options

• ₹ 69,200

• ₹ 71,000

• ₹ 64,700

• ₹ 62,900

Answer 1

₹ 64,700

Explanation:

Total Assets = Preliminary Expenses + P & L Debit Balance + Cash Balance + Other Assets

77,000 = 2,000 + 4,000 + 1,800 + Other Assets

77,000 = 7,800 + Other Assets

Other Assets = 77,000 – 7,800

Other Assets = 69,200

Loss on Realization = Book Value of Other Assets − Realization from Other Assets 

6,300 = 69,200 − Realization from Other Assets  

Realization from Other Assets = 69,200 − 6,300 

= 62,900

Total Assets Realized = Realization from Other Assets + Cash Balance

= 62,900 + 1,800

= 64,700