Question

On dissolution of the firm, sundry assets were of ₹ 1,17,000. Mohan took part of sundry assets at ₹ 72,000 (being 10% less than the book value). Sohan took the remaining sundry assets at 80% of the book value. The Realisation Account is to be credited with ______.

Options

• ₹ 1,01,600

• ₹ 1,08,000

• ₹ 72,000

• ₹ 84,000

Answer 1

On dissolution of the firm, sundry assets were of ₹ 1,17,000. Mohan took part of sundry assets at ₹ 72,000 (being 10% less than the book value). Sohan took the remaining sundry assets at 80% of the book value. The Realisation Account is to be credited with ₹ 1,01,600.

Explanation:

Mohan took his share of assets at ₹ 72,000, which is 10% less than its book value. Let the book value be X.

`X xx 90/100 = 72,000`

X = `(72,000)/0.90`

= ₹ 80,000

Remaining Book Value = Total Assets − Mohan’s Book Value

Remaining Book Value = 1,17,000 − 80,000

= ₹ 37,000

Sohan’s Takeover Value = `37,000 xx 80/100`

= ₹ 29,600

Total Credit = Mohan’s Takeover + Sohan’s Takeover

= 72,000 + 29,600

= ₹ 1,01,600