A and B are partners sharing profits equally. On the dissolution of their firm, the Realisation A/c shows a profit of ₹15,000. The Balance Sheet shows a General Reserve of ₹10,000 on 31st March 2021. The Capital Accounts of A and B show a credit balance of ₹10,000 each. How much is each of them entitled to receive on dissolution?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → ₹22,500 each
Each partner receives his capital plus his share of the general reserve and of the realisation profit (equal shares).
Capital = ₹10,000
Add: share of general reserve = ₹10,000 × 1/2 = ₹5,000
Add: share of realisation profit = ₹15,000 × 1/2 = ₹7,500
Amount due to each partner = ₹22,500