On dissolution of a firm, a partner's capital account has a credit balance of ₹12,000. His share of profit in realisation account is ₹10,000. He has paid firm's realisation expenses of ₹3,000 on behalf of the firm. He will finally get a payment of:
Answer & explanation
Correct answer: option 2
The correct answer is option 2- ₹25,000.
When realisation expenses are paid by a partner on behalf of the firm:
Realisation A/c Dr.
To Partner’s Capital A/c
So realisation expenses are refunded to the partner.
Thus, amount due to partner = Credit balance + profit on realisation + Realisation expenses
= 12,000 + 10,000 + 3,000
= 25,000