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Partnership - sale to a company

Accountancy

In the question it is said that the firm has a sum due to ( owe) A's estate ( that means Due to Mr.A right ). If we calculate the total amount due to A will be 120000(20000*3 years *2 half yearly). I understand that 20000 is paid till only 31.12.2001. because on 1/1/2002. The firm is getting dissolved. But my question is Since they deduct 20000 from A's executor capital account . why the 120000 has not been added to Mr. A's executor account? Why are they deducting from the amount that was brought (capital)and earned(profits, goodwill shares ) in the firm by A? Capital amount is different from the amount the firm due to him ( kind of loan from A?). Pls kindly clarify.

Deborah Susaiyappan

CA Inter

★ 8K+

17-Jun-23 14:26

422

Answers (2)

And interest is not allowed in the agreement. As per the partnership act. If. Deed does not allow it. It can not be provided. Then how did they provide interest on the capital of A

Thread Starter

Deborah Susaiyappan

CA Inter

★ 8K+

17-Jun-23 14:33

Due to A's estate means A's legal heir. After death if amount is not settled, interest is to be paid.

CA Suraj Lakhotia

Admin

19-Jun-23 09:53