Question

A and B are partners in a firm sharing profits in the ratio of 3:2 Mrs A has given a loan of Rs 20,000 to the firm and the firm also obtained a loan of Rs 10,000 from B. The firm was dissolved and its assets were realised for Rs25,000. State the order of payment of Mrs. A's loan and B's loan with reasons if there were no creditors of the firm

Answer 1

Mrs. A's loan would be paid first and then partner B's loan would be paid.

Answer 2

Answer:

Explanation: First, ₹20,000 will be paid for Mrs. A loan as she is an outsider, then remaining ₹5,000 will be paid as partners loan is repaid after repaying all external liability.