Determine the amount of Profit and Loss Account.

The correct option is (Dr.) 90,000.

Step-by-Step Explanation:

To determine the balance in the Profit and Loss Account, we apply the fundamental accounting equation (Balance Sheet equation):

$$\text{Total Liabilities}+\text{Capital}=\text{Total Assets}$$

Based on the partnership dissolution records, we have the following financial details:
1. Capital balance of partner G = ₹ 4,00,000
2. Capital balance of partner K = ₹ 3,00,000
3. Capital balance of partner B = ₹ 2,00,000
4. External Liabilities of the firm = ₹ 80,000
5. Sundry Assets = ₹ 8,50,000
6. Cash Balance = �� 40,000

Step 1: Calculate the Total Capital of the Partners
The combined capital of all partners is computed as:

$$\text{Total Capital}=₹\mathrm{4,00,000}+₹\mathrm{3,00,000}+₹\mathrm{2,00,000}=₹\mathrm{9,00,000}$$

Step 2: Calculate the Total of the Liabilities and Capital Side
The total equity and liabilities of the firm is the sum of total capital and external liabilities:

$$\text{Total Liabilities and Capital}=\text{Total Capital}+\text{External Liabilities}$$

$$\text{Total Liabilities and Capital}=₹\mathrm{9,00,000}+₹\mathrm{80,000}=₹\mathrm{9,80,000}$$

Step 3: Calculate the Total of the Known Assets
We sum the values of the known asset balances:

$$\text{Total Known Assets}=\text{Sundry Assets}+\text{Cash Balance}$$

$$\text{Total Known Assets}=₹\mathrm{8,50,000}+₹\mathrm{40,000}=₹\mathrm{8,90,000}$$

Step 4: Find the Balancing Figure (Profit and Loss Account)
Since the total of the liabilities side (₹ 9,80,000) is greater than the total of the known assets side (₹ 8,90,000), there is a deficit on the asset side of the Balance Sheet. This balancing figure represents the accumulated loss of the firm, which is shown in the Profit and Loss Account:

$$\text{Profit and Loss Account Balance}=\text{Total Liabilities and Capital}-\text{Total Known Assets}$$

$$\text{Profit and Loss Account Balance}=₹\mathrm{9,80,000}-₹\mathrm{8,90,000}=₹\mathrm{90,000}$$

An accumulated loss is shown on the assets side of a Balance Sheet and carries a debit balance. Therefore, the balance of the Profit and Loss Account is ₹ 90,000 with a Debit nature, represented as (Dr.) 90,000.