The book value of Land and Buildings is Rs. 30,000 and the market value Rs. 45,000. In case of…
Rs. 30,000 is debited to the transferor's realisation account, because the asset is transferred at its book value. The Rs. 45,000 market value does not change that initial…
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The book value of Land and Buildings is Rs. 30,000 and the market value Rs. 45,000. In case of Amalgamation in the nature of Purchase, which amount would be debited to Realisation A/c ?
Answer and explanation
Correct answer A
Rs. 30,000 is debited to the transferor's realisation account, because the asset is transferred at its book value. The Rs. 45,000 market value does not change that initial book-value transfer, and Rs. 15,000 is only the difference between the two values.
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Andhra Pradesh SET (APSET)