Question

A and B are partners in 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 realized for Rs. 25,000. State the order of payment of Mrs. A’s loan and B’s loan with reason if there were no creditor of the firm. 

Answer 1

(i) First of all, Rs. 20,000 will be paid to Mrs. A’s loan. 

(ii) B’s loan will be paid only Rs. 5,000 i.e. the money available for payment (sec. 48)