Question

On dissolution of a firm, there was an unrecorded asset of \(₹15,000\) which was taken over by a partner at \(₹13,000\). Partner’s capital account will be debited by :

• A. \(₹15,000\)
• B. \(₹28,000\)
• C. \(₹2,000\)
• D. \(₹13,000\)

Hint:

On dissolution, partners’ capital accounts are debited with the agreed takeover price of assets, not their original value.

Answer 1

The Correct Option is D

An unrecorded asset, possessing value but absent from a firm's financial records, is treated as follows upon dissolution when a partner acquires it. The partner's capital account is debited by the actual amount paid or agreed upon for the asset, not its book value.
In this specific instance, the asset was valued at \(₹15,000\) but acquired by the partner for \(₹13,000\).
Consequently, the partner's capital account is debited by \(₹13,000\).