Question

Aavya, Mitansh, and Praveen were partners in a firm. On 31^st March, 2023, the firm was dissolved. Creditors took over furniture of book value of ₹50,000 at ₹45,000 in part settlement of their amount of ₹60,000. The balance amount was paid to them through cheque. The amount paid through cheque will be:

• A. \rupee10,000
• B. \rupee50,000
• C. \rupee45,000
• D. \rupee15,000

Hint:

While settling creditors during dissolution, consider adjustments for assets taken over before calculating the balance payment.

Answer 1

The Correct Option is D

Total creditor amount: ₹60,000.
Amount adjusted for furniture: ₹45,000.
Remaining balance for creditors: ₹60,000 - ₹45,000 = ₹15,000.
This balance was paid by cheque.