A & B were partners in a partnership firm. Due to the ill health of B they decided to dissolve the firm. The position of assets and liabilities on the date of dissolution was:

It was agreed that following transactions will take place:

a) A wanted to start the business in sole proprietorship so he took building and furniture at 10% less than book value.
b) All the debtors proved good except a person C who did not pay ₹10,000

The amount recovered from the debtors is:

₹40,000

The correct answer is option 2- ₹40,000.

Debtors = 50,000.
A debtor named C did not pay 10,000.
So, realised amount from debtors = (50,000 - 10,000)
                                                     = 40,000