Arrange following in a sequence in which amount realised from Assets will be utilised to pay as per Section 48 of the Indian Partnership Act, 1932.A. Partner's LoanB. Partner's CapitalC. Secured debts of the firmD. Unsecured debts of the firmE. Residue to partnersChoose the correct answer from the options given below:
- AC, D, E, A, B
- BC, D, E, B, A
- CC, D, A, B, E
- DC, D, A, E, B
Solution & Step-by-step Explanation
According to Section 48 of the Indian Partnership Act, 1932, the sequence of utilizing assets realized during the dissolution of a firm is:First (C & D): Debts of the firm to third parties (Outside Liabilities). Secured debts (C) are settled followed by unsecured debts (D).Second (A): Payment to each partner rateably what is due to him from the firm for advances or loans as distinguished from capital (Partner's Loan).Third (B): Payment to each partner rateably what is due to him on account of capital (Partner's Capital).Fourth (E): If any surplus (residue) remains, it is distributed among the partners in their profit-sharing ratio.Thus, the sequence is C, D, A, B, E.