![]() The amount realized by this is used to pay off the creditors and all other liabilities of the business in a specific order. The simplest explanation for the above is that when a company is in the liquidation Liquidation Liquidation is the process of winding up a business or a segment of the business by selling off its assets. The current market price, which it can fetch at the end of 2 years, is $ 90,000, and this will be considered as the liquidation value and not $ 83,835, which is the asset’s book value. If we were to take the liquidation value of the above furniture, we would look more at the asset’s market value rather than the book value of the asset. So, the book value of this piece of office furniture at the end of year 2 will be $ 1,03,500 – $ 10,350 – $ 9,315 = $ 83,835. So total cost of acquisition will be $ 1,00,000 + $ 1,000 + $ 2,500 = $ 1,03,500ĭepreciation on furniture (for the sake of convenience, let us say that the depreciation rate is 10% p.a. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |