The balance sheet of a partnership firm disclosed Debtors and Bad-debts
Reserve at Rs. 40,000 and Rs. 4,000 respectively. On conversion of the
firm into a company, debtors are taken over at 10% less. What would be
debtors' value for such determination of net assets?
(A) Rs. 32,000;
(B) Rs. 32,400;
(C) Rs. 36,400;
(D) Rs. 34,000.
Answers
Answered by
0
Answer:
32400
Explanation:
40000-4000=36000
36000*10%=32400
Answered by
1
(B) Rs. 32,400
Here the reserves are set aside by the firm to cover the loss arising from any non payment by the debtors for the year. In the question, the partnership firm is converting into a company and we need to determine the debtor's value for determination of net assets.
Given that, Debtors at the time = ₹40,000
reserve at the time = ₹4,000
To calculate the value of debtors taken over, we need to subtract reserves from debtors =
= 40,000 - 4,000 = ₹36,000
The debtors are taken over at 10% less = 36,000 - 10% of 36,000
= 36,000 - 3,600
= ₹32,400
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