What is total amount paid to a partner if a partner is paid remuneration and also agreed amount as realisation expenses but realisation expenses came more than the agreed amount, at the time of dissolution of partnership firm?
Answer & explanation
Correct answer: option 2
The correct answer is option 2- Remuneration + Agreed amount of realisation expenses.
Remuneration & Agreed amount of realisation expenses paid to partner.
The following journal entry is passed for agreed remuneration to such partner who agrees to undertake the dissolution work-
Realisation A/c Dr.
To Partner’s Capital A/c
(Being remuneration and realisation expenses payable to partner)
* Agreed amount is paid to partner irrespective whether realisation expenses are more or less than the agreed amount.