Total assets transferred to Realization Account = Rs. 1,00,000
Kiran takes over 50% of these assets at 20% discount.
Finding the book value of assets taken by Kiran:
50% of Rs. 1,00,000 = Rs. 50,000
This Rs. 50,000 represents the book value (original value) of assets that Kiran is taking over.
Applying the 20% discount:
Discount = 20% of Rs. 50,000 = 10020×50,000 = Rs. 10,000
Net assets taken over by Kiran = Rs. 50,000 - Rs. 10,000 = Rs. 40,000
The discount is calculated on the book value of assets being taken over (Rs. 50,000), not on the total assets. Kiran pays Rs. 40,000 for assets having a book value of Rs. 50,000.
Answer: Option 4 (Rs. 40,000)