Q4 Nishu (Debtor) from whom an amount was due, she was declared insolvent and paid only 70 paisa in a rupee. Total bad debts from her were written off ₹7,200. What amount is received by the firm?
(A) ₹24,000
(B) ₹16,800
(C) ₹15,000
(D) ₹16,500
Answer (2)
To solve this problem, we need to determine the total amount from Nishu (Debtor) before any amount was declared as bad debts and how much was actually received by the firm after the insolvency.
Firstly, let's understand the situation:
It is stated that Nishu was declared insolvent, meaning she could not pay all her debts.
She is able to pay only 70 paisa on every rupee owed.
The firm wrote off total bad debts of ₹7,200, which means this was the amount the firm couldn't recover.
We need to calculate the original total debt before bad debts were written off to find out how much was actually received.
Let's denote the total original debt as x .
The problem states that Nishu managed to pay only 70 paisa on every rupee: Amount received = 0.70 x
The bad debts written off were ₹7,200, representing the part of the debt not paid: x − 0.70 x = 7 , 200
Solving this equation will help us find x : 0.30 x = 7 , 200 x = 0.30 7 , 200 x = 24 , 000
Now, Nishu managed to pay 70 paisa in a rupee from this total amount: Amount received = 0.70 × 24 , 000 = 16 , 800
Thus, the amount received by the firm is ₹16,800.
Therefore, the correct choice is (B) ₹16,800.
The firm received ₹16,800 from Nishu after she was declared insolvent and could only repay 70 paisa for every rupee owed. This was calculated from her total original debt of ₹24,000, where bad debts of ₹7,200 were written off. The correct choice is (B) ₹16,800.
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