Sharan, Raman and Manan are partners sharing profit and losses in the ratio of 1:1:1. Due to heavy losses, they decide to close their business. At the time of dissolution, Sharan agreed to bear all realisation expenses. Realisation expenses were to be paid by the firm. For the service Sharan is paid Rs.6,000. Actual expenses on realisation paid by the firm amounted to Rs. 9,000. Realisation A/c will be:
Sharan, Raman and Manan are partners sharing profit and losses in the ratio of 1:1:1. Due to heavy losses, they decide to close their business. At the time of dissolution, Sharan agreed to bear all realisation expenses. Realisation expenses were to be paid by the firm. For the service Sharan is paid Rs.6,000. Actual expenses on realisation paid by the firm amounted to Rs. 9,000. Realisation A/c will be:
Solution
✅ Correct Option: 2
Since Sharan agreed to bear the expenses, the actual paid by the firm is charged to his capital account, not to Realisation. Only the agreed remuneration of for his services is a firm expense, so Realisation Account is debited by .
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