Question : Half of the Trade Creditors valued Rs 40,000 accepted Plant and Machinery at 10% less than the book value and Cash of Rs. 5,000 in full settlement of their claims. The remaining Trade Creditors were paid at a discount of 10%. The entry will be
Option 1: Realization account debited and Bank account credited by Rs 5,000
Option 2: Realization account debited and Bank account credited by Rs 36,000
Option 3: Realization account debited and Bank account credited by Rs 41,000
Option 4: Realization account debited and Bank account credited by Rs 80,000
Correct Answer: Realization account debited and Bank account credited by Rs 41,000
Solution : Answer = Realization account debited and Bank account credited by Rs 41,000 Total value of creditors= 80,000(40,000×2) Paid cash= 5,000 Paid to creditor= 40,000- 4,000(40,000×10%)= 36,000. Total payment = 41,000. Realisation A/C Dr 41,000 To Bank A/C 41,000. Hence, the correct option is 3.
Question : Trade creditors Rs. 1,60,000. Half of the trade creditors accepted Plant and Machinery Settled an agreed valuation of Rs. 54,000 and cash in full settlement of their claims after Allowing a discount of Rs. 16,000. The remaining trade creditors were paid 90% in the final
Question : Realization expenses of Rs. 5,000 were to be borne by Pavit, a partner. However, it was paid by Hitesh, another partner. It was to be recorded in the books. The entry will be
Question : A debtor of Rs 31,000 agreed to pay the dissolution expenses which were Rs 30,000 in full settlement of his debt. Choose the correct option.
Question : Goodwill of Rs. 75,000 and prepaid fire insurance of Rs. 10,000. (already transferred to realization account) What entry will be passed at the time of realization of assets?
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