A business has the following items in it:
Land Rs 1,500,000
Machinery Rs 80,000
Cash Rs 20,000
Owners equity Rs 900,000
Loan Rs 500,000
Creditors?

R s .2, 00, 000

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R s .7, 00, 000

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R s .8, 00, 000

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R s .1, 100, 000

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Solution

The correct option is A $R s .2, 00, 000$
Total assets = Total liability
Total assets = Land + Machinery + Cash
Total assets = $R s .15, 00, 000$ + $R s .80, 000$ + $R s .20, 000$ = $R s .16, 00, 000$
Hence, Total Liability = $R s .16, 00, 000$
Total liability = Owner's equity + Loan + Creditor
$R s .16, 00, 000$ = $R s .9, 00, 000$ + $R s .5, 00, 000$ + Creditor
Therefore, Creditor = $R s .2, 00, 000$ .

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A business has the following items in it:Land Rs 1,500,000Machinery Rs 80,000Cash Rs 20,000Owners equity Rs 900,000Loan Rs 500,000Creditors?

A business has the following items in it:
Land Rs 1,500,000
Machinery Rs 80,000
Cash Rs 20,000
Owners equity Rs 900,000
Loan Rs 500,000
Creditors?