Question

At the time of the dissolution of a partnership firm in which X, Y and Z were partners sharing profit in 2:2:1 ratio, the following information was made available. Arrange them in the sequence in which they will be paid.
(A) A's Loan to the firm Rs 50,000
(B) Creditors Rs 2,00,000
(C) A's Capital Rs 2,50,000 , B's Capital Rs 2,00,000 and C's Capital Rs 1,00,000
(D) Balance available after settlement of all the stakeholders.
Choose the correct answer from the options given below:

• A. (A), (B), (C), (D)
• B. (A), (B), (D), (C)
• C. (B), (A), (C), (D)
• D. (B), (C), (A), (D)

Hint:

Order on dissolution: outside creditors, then partner loans, then partner capitals, then the surplus balance.

Answer 1

The Correct Option is C

Step 1: Recall the order of payment
On dissolution, the money from selling assets is paid in a fixed order. First come the outside liabilities (creditors). Next come the loans given by partners. After that the partners' capitals are returned. Anything left is the surplus, which is shared among partners in the profit ratio.

Step 2: Place each item
(B) Creditors are outsiders, so they are paid first.
(A) A's loan is a liability to a partner, and is paid before capital. This is second.
(C) The capitals of the partners come third.
(D) The balance left after all this is paid last.

Step 3: Write the sequence
\[ \text{(B)} \to \text{(A)} \to \text{(C)} \to \text{(D)} \]

Step 4: Check the options
Options 1 and 2 pay the partner's loan before creditors, which is wrong. Option 4 pays the capital before the loan, which is wrong. Option 3 matches the sequence.

Final Answer:
The order is Creditors, Partner's loan, Capitals, Balance. This is option 3. \[ \boxed{\text{Option 3}} \]