Question

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

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

Hint:

If a partner is given a fixed remuneration for handling dissolution, their capital account is credited with the full agreed amount, regardless of actual expenses incurred.

Answer 1

The Correct Option is A

1. Pawan was to receive remuneration of ₹75,000.
2. Pawan undertook to pay dissolution expenses. 
3. Pawan paid ₹60,000 as actual dissolution expenses. 
4. Impact on Pawan's Capital Account: 
- Pawan's capital account is credited with his agreed remuneration of ₹75,000, regardless of actual expenses. 
- The actual expenses of ₹60,000, though borne by Pawan, do not alter the remuneration credited. 

Therefore, Pawan's capital account will be credited with ₹75,000 (Option A).