State the order of payment of the following at the time of dissolution of firm:
(a) In paying to each partner proportionately what is due to him on account of capital
(b) In paying the debts of the firm to the third parties
(c) In paying each partner proportionately what is due to him/her from the firm for advances as distinguished from capital (i.e. partner’ loan)

bca

At the time of dissoultion of partnership firm, the assets shall be applied in the following manner and order:
(i) In paying the debts of the firm to the third parties;
(ii) In paying each partner proportionately what is due to him/her from the firm for advances as distinguished from capital (i.e. partner’ loan);
(iii) In paying to each partner proportionately what is due to him on account of capital; and
(iv) the residue, if any, shall be divided among the partners in their profit sharing ratio.