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Mohan purchased a machinery amounting Rs. 10,00,000 on 1st April, 2001. On 31st March, 2011, similar machinery could be purchased for Rs. 20,00,000 but the realizable value of the machinery (purchased on 1.4.2001) was estimated at Rs. 15,00,000. The present discounted value of the future net cash inflows that the machinery was expected to generate in the normal course of business, was calculated as Rs. 12,00,000.
Q. The realizable value of machinery is:
Q. The realizable value of machinery is:
- a)Rs. 10,00,000
- b)Rs. 20,00,000
- c)Rs. 15,00,000
- d)Rs. 12,00,000
Correct answer is option 'C'. Can you explain this answer?
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Most Upvoted Answer
Mohan purchased a machinery amounting Rs. 10,00,000 on 1stApril, 2001....
Since the realizable value of the machinery is Rs. 15,00,000 as on purchase date (1.4.2001) hence the realizable value will be Rs. 15,00,000.
Therefore option (c) is correct.
Therefore option (c) is correct.
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Community Answer
Mohan purchased a machinery amounting Rs. 10,00,000 on 1stApril, 2001....
Explanation:
To find the realizable value of the machinery, we need to compare the purchase price of the machinery with its present discounted value and the price of similar machinery at the end of the period.
Given information:
- Purchase price of machinery on 1st April 2001 = Rs. 10,00,000
- Price of similar machinery on 31st March 2011 = Rs. 20,00,000
- Present discounted value of net cash inflows = Rs. 12,00,000
Step 1:
Calculate the profit or loss on revaluation of the machinery:
Revaluation amount = Price of similar machinery on 31st March 2011 - Purchase price of machinery on 1st April 2001
Revaluation amount = Rs. 20,00,000 - Rs. 10,00,000
Revaluation amount = Rs. 10,00,000
Step 2:
Calculate the net realizable value of the machinery:
Net realizable value = Purchase price of machinery on 1st April 2001 + Revaluation amount - Present discounted value of net cash inflows
Net realizable value = Rs. 10,00,000 + Rs. 10,00,000 - Rs. 12,00,000
Net realizable value = Rs. 8,00,000
Step 3:
Compare the net realizable value with the price of similar machinery at the end of the period:
If the net realizable value is less than the price of similar machinery at the end of the period, then the realizable value is the net realizable value.
If the net realizable value is greater than the price of similar machinery at the end of the period, then the realizable value is the price of similar machinery at the end of the period.
In this case, the net realizable value of the machinery (Rs. 8,00,000) is less than the price of similar machinery at the end of the period (Rs. 20,00,000). Therefore, the realizable value of the machinery is Rs. 8,00,000.
Hence, the correct answer is option 'C' - Rs. 15,00,000.
To find the realizable value of the machinery, we need to compare the purchase price of the machinery with its present discounted value and the price of similar machinery at the end of the period.
Given information:
- Purchase price of machinery on 1st April 2001 = Rs. 10,00,000
- Price of similar machinery on 31st March 2011 = Rs. 20,00,000
- Present discounted value of net cash inflows = Rs. 12,00,000
Step 1:
Calculate the profit or loss on revaluation of the machinery:
Revaluation amount = Price of similar machinery on 31st March 2011 - Purchase price of machinery on 1st April 2001
Revaluation amount = Rs. 20,00,000 - Rs. 10,00,000
Revaluation amount = Rs. 10,00,000
Step 2:
Calculate the net realizable value of the machinery:
Net realizable value = Purchase price of machinery on 1st April 2001 + Revaluation amount - Present discounted value of net cash inflows
Net realizable value = Rs. 10,00,000 + Rs. 10,00,000 - Rs. 12,00,000
Net realizable value = Rs. 8,00,000
Step 3:
Compare the net realizable value with the price of similar machinery at the end of the period:
If the net realizable value is less than the price of similar machinery at the end of the period, then the realizable value is the net realizable value.
If the net realizable value is greater than the price of similar machinery at the end of the period, then the realizable value is the price of similar machinery at the end of the period.
In this case, the net realizable value of the machinery (Rs. 8,00,000) is less than the price of similar machinery at the end of the period (Rs. 20,00,000). Therefore, the realizable value of the machinery is Rs. 8,00,000.
Hence, the correct answer is option 'C' - Rs. 15,00,000.
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Mohan purchased a machinery amounting Rs. 10,00,000 on 1stApril, 2001. On 31stMarch, 2011, similar machinery could be purchased for Rs. 20,00,000 but the realizable value of the machinery (purchased on 1.4.2001) was estimated at Rs. 15,00,000. The present discounted value of the future net cash inflows that the machinery was expected to generate in the normal course of business, was calculated as Rs. 12,00,000.Q. The realizable value of machinery is:a)Rs. 10,00,000b)Rs. 20,00,000c)Rs. 15,00,000d)Rs. 12,00,000Correct answer is option 'C'. Can you explain this answer?
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Mohan purchased a machinery amounting Rs. 10,00,000 on 1stApril, 2001. On 31stMarch, 2011, similar machinery could be purchased for Rs. 20,00,000 but the realizable value of the machinery (purchased on 1.4.2001) was estimated at Rs. 15,00,000. The present discounted value of the future net cash inflows that the machinery was expected to generate in the normal course of business, was calculated as Rs. 12,00,000.Q. The realizable value of machinery is:a)Rs. 10,00,000b)Rs. 20,00,000c)Rs. 15,00,000d)Rs. 12,00,000Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Mohan purchased a machinery amounting Rs. 10,00,000 on 1stApril, 2001. On 31stMarch, 2011, similar machinery could be purchased for Rs. 20,00,000 but the realizable value of the machinery (purchased on 1.4.2001) was estimated at Rs. 15,00,000. The present discounted value of the future net cash inflows that the machinery was expected to generate in the normal course of business, was calculated as Rs. 12,00,000.Q. The realizable value of machinery is:a)Rs. 10,00,000b)Rs. 20,00,000c)Rs. 15,00,000d)Rs. 12,00,000Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Mohan purchased a machinery amounting Rs. 10,00,000 on 1stApril, 2001. On 31stMarch, 2011, similar machinery could be purchased for Rs. 20,00,000 but the realizable value of the machinery (purchased on 1.4.2001) was estimated at Rs. 15,00,000. The present discounted value of the future net cash inflows that the machinery was expected to generate in the normal course of business, was calculated as Rs. 12,00,000.Q. The realizable value of machinery is:a)Rs. 10,00,000b)Rs. 20,00,000c)Rs. 15,00,000d)Rs. 12,00,000Correct answer is option 'C'. Can you explain this answer?.
Mohan purchased a machinery amounting Rs. 10,00,000 on 1stApril, 2001. On 31stMarch, 2011, similar machinery could be purchased for Rs. 20,00,000 but the realizable value of the machinery (purchased on 1.4.2001) was estimated at Rs. 15,00,000. The present discounted value of the future net cash inflows that the machinery was expected to generate in the normal course of business, was calculated as Rs. 12,00,000.Q. The realizable value of machinery is:a)Rs. 10,00,000b)Rs. 20,00,000c)Rs. 15,00,000d)Rs. 12,00,000Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Mohan purchased a machinery amounting Rs. 10,00,000 on 1stApril, 2001. On 31stMarch, 2011, similar machinery could be purchased for Rs. 20,00,000 but the realizable value of the machinery (purchased on 1.4.2001) was estimated at Rs. 15,00,000. The present discounted value of the future net cash inflows that the machinery was expected to generate in the normal course of business, was calculated as Rs. 12,00,000.Q. The realizable value of machinery is:a)Rs. 10,00,000b)Rs. 20,00,000c)Rs. 15,00,000d)Rs. 12,00,000Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Mohan purchased a machinery amounting Rs. 10,00,000 on 1stApril, 2001. On 31stMarch, 2011, similar machinery could be purchased for Rs. 20,00,000 but the realizable value of the machinery (purchased on 1.4.2001) was estimated at Rs. 15,00,000. The present discounted value of the future net cash inflows that the machinery was expected to generate in the normal course of business, was calculated as Rs. 12,00,000.Q. The realizable value of machinery is:a)Rs. 10,00,000b)Rs. 20,00,000c)Rs. 15,00,000d)Rs. 12,00,000Correct answer is option 'C'. Can you explain this answer?.
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Mohan purchased a machinery amounting Rs. 10,00,000 on 1stApril, 2001. On 31stMarch, 2011, similar machinery could be purchased for Rs. 20,00,000 but the realizable value of the machinery (purchased on 1.4.2001) was estimated at Rs. 15,00,000. The present discounted value of the future net cash inflows that the machinery was expected to generate in the normal course of business, was calculated as Rs. 12,00,000.Q. The realizable value of machinery is:a)Rs. 10,00,000b)Rs. 20,00,000c)Rs. 15,00,000d)Rs. 12,00,000Correct answer is option 'C'. Can you explain this answer?, a detailed solution for Mohan purchased a machinery amounting Rs. 10,00,000 on 1stApril, 2001. On 31stMarch, 2011, similar machinery could be purchased for Rs. 20,00,000 but the realizable value of the machinery (purchased on 1.4.2001) was estimated at Rs. 15,00,000. The present discounted value of the future net cash inflows that the machinery was expected to generate in the normal course of business, was calculated as Rs. 12,00,000.Q. The realizable value of machinery is:a)Rs. 10,00,000b)Rs. 20,00,000c)Rs. 15,00,000d)Rs. 12,00,000Correct answer is option 'C'. Can you explain this answer? has been provided alongside types of Mohan purchased a machinery amounting Rs. 10,00,000 on 1stApril, 2001. On 31stMarch, 2011, similar machinery could be purchased for Rs. 20,00,000 but the realizable value of the machinery (purchased on 1.4.2001) was estimated at Rs. 15,00,000. The present discounted value of the future net cash inflows that the machinery was expected to generate in the normal course of business, was calculated as Rs. 12,00,000.Q. The realizable value of machinery is:a)Rs. 10,00,000b)Rs. 20,00,000c)Rs. 15,00,000d)Rs. 12,00,000Correct answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Mohan purchased a machinery amounting Rs. 10,00,000 on 1stApril, 2001. On 31stMarch, 2011, similar machinery could be purchased for Rs. 20,00,000 but the realizable value of the machinery (purchased on 1.4.2001) was estimated at Rs. 15,00,000. The present discounted value of the future net cash inflows that the machinery was expected to generate in the normal course of business, was calculated as Rs. 12,00,000.Q. The realizable value of machinery is:a)Rs. 10,00,000b)Rs. 20,00,000c)Rs. 15,00,000d)Rs. 12,00,000Correct answer is option 'C'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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