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Question
A, B and C are in partnership business. A used ₹ 2,00,000 belonging to the firm without the information to other partners and made a profit of ₹ 35,000 by using this amount. Which decision should be taken by the firm to rectify this situation?
Options
A need to return only ₹ 2,00,000 to the firm.
A is required to return ₹ 35,000 to the firm.
A is required to pay back ₹ 35,000 only equally to B and C.
A need to return ₹ 2,35,000 to the firm.
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Solution
A need to return ₹ 2,35,000 to the firm.
Explanation:
A is required to return both the principal amount of ₹ 2,00,000 and the profit of ₹ 35,000 earned through the use of the firm’s money. This ensures the firm is fully compensated for both the amount and the profit generated from it. Therefore, A needs to return ₹ 2,00,000 (the amount used) + ₹ 35,000 (the profit earned), totalling ₹ 2,35,000.
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|
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|
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| Mandar | 95,000 | Plant & Machinery | 60,000 | |
| Prasad | 1,00,000 | Furniture | 10,000 | |
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| Balance Sheet as on 31st March, 2019 | ||||
| Liabilities | Amount (₹) | Assets | Amount (₹) | |
| Capital A/c: | Building | 60,000 | ||
| Riddhi | 80,000 | Furniture | 24,000 | |
| Siddhi | 60,000 | Machinery | 20,000 | |
| Reserve Fund | 16,000 | Debtors | 17,600 | 16,000 |
| Siddhi's Loan A/c | 4,000 | Less: RDD | 1,600 | |
| Creditors | 30,000 | Stock | 40,000 | |
| Investment | 8,000 | |||
| Interest Receivable | 2,000 | |||
| Bank | 20,000 | |||
| 1,90,000 | 1,90,000 | |||
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- Riddhi took over the Investment at ₹ 10,000 and Furniture at book value.
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| Balance Sheet as on 31st March, 2023 | |||||
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) | Amount (₹) |
| Capital : | Plant | 2,40,000 | |||
| Vinay | 1,80,000 | 3,60,000 | Debtors | 90,000 | |
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| Monil | 60,000 | ||||
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| Sundry Creditors | 18,000 | ||||
| Bank Overdraft | 78,000 | ||||
| 4,80,000 | 4,80,000 | ||||
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______ means winding-up of partnership firm.
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| Balance Sheet of Mita and Sita as on 31st March, 2022 |
|||||
| Liabilities | (₹) | Assets | (₹) | ||
| Sundry Creditors | 40,000 | Land & Building | 29,000 | ||
| Sita's Son's Loan | 2,000 | Plant & Machinery | 20,000 | ||
| Bank Overdraft | 8,000 | Stock | 3,000 | ||
| Capital Accounts: | Debtors | 26,400 | 26,000 | ||
| Mita | 20,000 | 30,000 | Less: Provision for Doubtful Debts |
400 | |
| Sita | 10,000 | Bank | 2,000 | ||
| 80,000 | 80,000 | ||||
The partnership firm was dissolved on the date of the Balance Sheet subject to the following adjustments:
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|
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