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 entitled to a remuneration of Rs.75,000 for handling the disSolution process. As he agreed to bear the disSolution expenses of Rs.60,000, this expense does not impact the amount credited to his capital account. The full remuneration of Rs.75,000 is credited to Pawan’s capital account, irrespective of the expenses borne. 
Conclusion: Pawan’s capital account will be credited by \( Rs.75,000 \).