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Question
Sundry Assets were of ₹ 1,17,000. Y is to take some Sundry Assets at ₹ 72,000 (being 10% less than the book value). Z is to take remaining sundry assets at 80% of the book value. Realisation Account is to be credited with ______.
Options
₹ 1,01,600
₹ 1,08,000
₹ 72,000
None of these.
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Solution
Sundry Assets were of ₹ 1,17,000. Y is to take some Sundry Assets at ₹ 72,000 (being 10% less than the book value). Z is to take remaining sundry assets at 80% of the book value. Realisation Account is to be credited with ₹ 1,01,600.
Explanation:
Y took some assets for ₹ 72,000, which is 10% less than their book value (meaning it is 90% of the book value).
Book Value of Y’s Assets = `(72,000)/(90%)`
= ₹ 80,000
Find the remaining book value for Z:
Remaining Book Value = Total Assets − Book Value of Y’s Assets
Remaining Book Value = 1,17,000 − 80,000
= ₹ 37,000
Z takes them at 80% of this remaining book value.
Z’s Takeover Value = `37,000 xx 80/100`
= ₹ 29,600
The total amount credited is the sum of what both partners took over.
Total Credited = Y’s Value + Z’s Value
= 72,000 + 29,600
= ₹ 1,01,600
