Question

Sushil and Sapna were partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2025, the firm was dissolved. On the date of dissolution there existed a balance of ₹ 1,20,000 in sundry creditors account. The sundry creditors were payable after three months. They were paid immediately at a discount of 12% p.a. The amount paid to sundry creditors was :

• A. ₹ 1,20,000
• B. ₹ 1,23,600
• C. ₹ 1,16,400
• D. ₹ 1,34,400

Hint:

When a liability is paid before the due date, discount is allowed for the unexpired period. Remember:

• Discount = Amount × Rate × Time (in years)
• For 3 months, time = 3/12 = 1/4 year
• Amount Paid = Total Liability - Discount

Always convert the time period to years when using annual rate!

Answer 1

The Correct Option is C