Based on following Balance Sheet of Tarnav and Manav as at 31^st March 2022, answer question:

                       Balance Sheet as at 31^st March 2022

On that date the firm was dissolved on the following term:

(i) Tarnav promised to pay Sanjay's loan and took over stock in trade at ₹4,000.
(ii) Creditors payable after one month, were paid immediately at 6% discount.
(iii) Debtors of ₹1,000 proved bad, plant realised 130%.
(iv) Expenses on Realisation were ₹1,500 borne and paid by Manav.
(v) Manav took over an old computer completely written off from the book at ₹500.

Calculate amount paid to creditors.

₹29,850

The correct answer is Option 1 - â‚¹29,850.

Creditors = ₹30,000
Discount = 6%
Discount = 30,000 x 6/100 × 1/12
             = ₹150
Paid amount to creditors = 30,000 - 150
                                    = ₹29,850

Note- Discount is calculated for 1 month only because creditors are paid in 1 month advance only.