When plant and machinery are handed over to a creditor at an agreed valuation of 10% less than the book value, the following steps occur:
Agreed Valuation = ₹60,000 × (1 - 10/100) = ₹60,000 × 0.9 = ₹54,000
At the time of dissolution, the asset (Plant and Machinery) is transferred at the agreed valuation of ₹54,000. This will be recorded as a transfer to Realisation Account for ₹54,000, and the Machinery account will be credited with its book value of ₹60,000. The difference of ₹6,000 (₹60,000 - ₹54,000) will be recorded as a loss on realisation.
Therefore, the correct journal entry would be:
Realisation A/c ...... Dr. 54,000 To Machinery A/c 54,000
This reflects the agreed valuation of the asset handed over to the creditor.
Thus, the correct answer is: (1) Realisation A/c ...... Dr. 54,000
To Machinery A/c 54,000
List-I | List-II |
(A) Nominal Capital | (I) Offered to the public |
(B) Reserve Capital | (II) Called up capital minus calls in arrears |
(C) Paid up Capital | (III) Memorandum of Association |
(D) Issued Capital | (IV) Called only at the time of winding up |
List-I | List-II | ||
A | Megaliths | (I) | Decipherment of Brahmi and Kharoshti |
B | James Princep | (II) | Emerged in first millennium BCE |
C | Piyadassi | (III) | Means pleasant to behold |
D | Epigraphy | (IV) | Study of inscriptions |