Question

Pawan, a partner, was appointed to look after the process of disSolution of the firm, for which he was allowed a remuneration of Rs.75,000. Pawan agreed to bear the disSolution expenses. Actual disSolution expenses Rs.60,000 were paid by Pawan. Pawan’s capital account will be credited by:

• A. Rs.75,000
• B. Rs.60,000
• C. Rs.15,000
• D. Rs.10,000

Hint:

When a partner is entitled to remuneration for disSolution and agrees to bear expenses, their capital account is credited with the full remuneration amount, as expenses borne are their responsibility.

Answer 1

The Correct Option is A

Pawan was to receive a remuneration of Rs.75,000 for managing the dissolution process. He agreed to cover the dissolution expenses of Rs.60,000. Consequently, this expense did not affect the credit to his capital account. The total remuneration of Rs.75,000 is credited to Pawan’s capital account, regardless of the expenses he bore.
Conclusion: Pawan’s capital account will be credited by \( Rs.75,000 \).