Question

Shiv, one of the partners was to receive 2% of the value of net assets realised as remuneration for completing the dissolution work and was to bear realisation expenses. Realisation expenses of ₹ 2,500 were paid by Shiv. The assets (excluding Cash at Bank ₹ 7,500) were realised for ₹ 3,75,000 and cash paid to outside liabilities amounted to ₹ 1,00,000. Realisation Account for remuneration to Shiv is to be debited with ______.

Options

• ₹ 5,650

• ₹ 7,500

• ₹ 5,500

• ₹ 6,500

Answer 1

Shiv, one of the partners was to receive 2% of the value of net assets realised as remuneration for completing the dissolution work and was to bear realisation expenses. Realisation expenses of ₹ 2,500 were paid by Shiv. The assets (excluding Cash at Bank ₹ 7,500) were realised for ₹ 3,75,000 and cash paid to outside liabilities amounted to ₹ 1,00,000. Realisation Account for remuneration to Shiv is to be debited with ₹ 5,500.

Explanation:

Shiv’s Remuneration = `2/100 xx (3,75,000 - 1,00,000)`

= `2/100 xx 2,75,000`

= ₹ 5,500