New RBI Grade B 2025 Notification will come Soon! Enroll Here

    Question

    An entity purchases 1,000 shares of X Ltd. at ₹120

    per share. Brokerage and taxes amount to ₹10,000. At year-end, the fair market value of the investment is ₹1,05,000. As per AS 13, what amount should be shown as the value of current investment in the balance sheet?
    A ₹1,20,000 Correct Answer Incorrect Answer
    B ₹1,30,000 Correct Answer Incorrect Answer
    C ₹1,05,000 Correct Answer Incorrect Answer
    D ₹1,25,000 Correct Answer Incorrect Answer

    Solution

    Explanation:As per AS 13, current investments are carried at lower of cost and fair value. •Cost = (1,000 × ₹120) + ₹10,000 = ₹1,30,000 •Fair value = ₹1,05,000 Hence, value in books = ₹1,05,000

    Practice Next