Acharya Marathe college SYBAF

Piecemeal Distribution of Cash

Q1. A, B, C share profit & Losses in the proportion of 3:2:1. Their balance sheet is as follows:
Liabilities ₹ Assets ₹
Capital A/c: Sundry Assets 80,000
A 30,000
B 30,000
C 20,000
80,000 80,000
The partnership is dissolved, and the assets are realised as follows:
First realisation ₹17,000
Second Realisation ₹21,000
Final Realisation ₹36,000
Show distribution of cash at each stage

Q2. From the following Balance Sheet of M/s Ideal Store with S, A and N as partners sharing
profit and losses in the ratio of 5:3:2. The Balance Sheet on the date of dissolution was as
follows:
Liabilities ₹ Assets ₹
Partners’ Capital A/c: Fixed Assets 80,000
S 38,800 Current Assets 60,000
A 20,400 Cash in hand 9,600
N 26,000
General Reserve 19,200
S’s Loan 21,200
Sundry Creditors 24,000
1,49,600 1,49,600
(1) Realisation expenses were estimated at ₹4,000
(2) The assets were realised as under:
First Instalment ₹ 61,280
Second Instalment ₹ 28,720
Final Instalment ₹ 20,000
(3) Actual Realisation expenses were ₹ 3,000 only
Prepare a statement showing piecemeal distribution of cash by adopting Excess Capital
Method.

Q3. P, Q and R were in partnership, sharing profits and losses in the ratio of 1/2, 1/3, 1/6
respectively. Their firm was dissolved as on 31st December 2013 on which date the Balance
sheet of the firm was as under:
Liabilities ₹ Assets ₹
Partners’ Capital A/c: Cash 4,000
P 17,000 Debtors 42,000
Q 8,000 Stock 16,000
R 1,000

Complied By Dipesh Sir

Acharya Marathe college SYBAF

General Reserve 6,000

Loans
P 6,000
Q 4,000
Creditors 20,000
62,000 62,000
It was agreed that the realisation should be distributed in their due order at the end of each
fortnight, the realisation and expenses were as under:
Particulars Debtors Stock Expenses
₹ ₹ ₹
th
15 January 2014 7,500 4,500 1,000
31st January 2014 10,500 500 500
th
15 February 2014 8,500 8,500 1,000
th
28 February 2014 10,500 500 400
th
15 March 2014 2,050 3,050 600
Stock were completely disposed off and the remaining debtors were to be taken over by P
at an agreed amount of ₹ 600.
Show the Statement of distribution of cash, following Relative Capitals Method.

Q4. A, B, C are partners sharing profits and losses in the ratio of 4:2:1. They decided to
dissolve the partnership as on March 31, 2014 when their Balance sheet was as follows:
Liabilities ₹ Assets ₹
Creditors 11,400 Cash 140
General Reserve 18,900 Investment 30,000
Bank Overdraft 32,500 Stock 1,28,300
Partners’ Capital A/c: 6,000 Debtors 45,400
A 80,000 Machinery 32,600
B 1,60,000 Furniture 4,900
C 1,30,000 Building 1,91,460
4,32,800 4,32,800
All Creditors must be paid off ₹ 2,400 have to be provided for realisation expenses.
Thereafter all cash received should be distributed among the partners.
The amounts were realised as follows:
1st Instalment: ₹ 30,720
nd
2 Instalment: ₹ 36,800
rd
3 Instalment: ₹ 2,12,840
th
4 Instalment: ₹ 92,600
The actual realisation expenses were ₹ 1200. Prepare a statement showing distributed of
cash as per Excess Capital Method.

Q5. Jaya, Rekha and Sushma carrying on business in partnership decided to dissolve it on
and from 30th September 2013. The following was their Balance Sheet on the date:
Balance Sheet
Liabilities ₹ Assets ₹
Capital Accounts: Fixed Assets 40,000

Complied By Dipesh Sir

Acharya Marathe college SYBAF

J 20,000 Current Assets 22,000

R 5,000 Bank 13,000
S 10,000
General Reserve 30,000
Sundry Creditors 10,000
75,000 75,000
As per the arrangement with the bank, the partners were entitled to withdraw ₹ 4,000
immediately and ₹ 9,000 after 1st December 2013. It was decided that after keeping aside an
amount of ₹ 1,000 for estimated realisation expenses, the available funds should be
distributed amongst the partners as and when realised.
The following were the realisation:
Particulars Fixed Assets Current Assets
₹ ₹
st
31 October 2013 (First) 10,000 5,000
15th November 2013 (Second) 26,000 12,000
30th December 2013 (Final) 10,000 12,000
Actual realisation expenses amounted to ₹ 700. You are requested to submit a statement
showing distribution of Cash amongst the partners by Proportionate Capital Method.
Q6. Amar, Akbar and Anthony were partnership sharing profits in the ratio 1/2, 1/4, 1/4.
Their Balance sheet as on 31st December 2013 was as under, the date on which they decided
to dissolve the firm.
Balance Sheet As on 31st December
Liabilities ₹ Assets ₹
Creditors 15,000 Cash 9,000
Income Tax Payable 4,000 Stock 40,000
Loan from Bank 30,000 Debtors 60,000
(Secured by pledge of stock) Furniture 36,000
Loan from Akbar 11,000 Motor Car 25,000
Partners’ Capital
Amar 40,000
Akbar 40,000
Anthony 30,000
1,70,000 1,70,000
(1) Bank could realise only ₹ 25,000 on disposal of stock.
(2) A sum of ₹ 3,000 was spent on furniture for getting better price.
(3) Other assets were realised as follows: In January 2014 ₹ 12,000, In February 2014
₹ 15,000, In March 2014 ₹ 10,000, In April 2014 ₹ 30,000, In May 2014 ₹ 35,000.
The Partners distributed the cash as and when available. Using Highest relative Capital
Method, show the distribution of cash.

Q7. The firm Apna store presented you the following Balance Sheet drawn as at 31 st March
2013:
Liabilities ₹ Assets ₹
Sundry Creditors 37,000 Cash in hand 3,000
Partners’ Capital A/c: Sundry Debtors 34,000

Complied By Dipesh Sir

Acharya Marathe college SYBAF

A 40,000 Stock in Trade 39,000

B 30,000 Plant and Machinery 51,000
C 27,000 97,000 Current Account:
B 4,000
C 3,000 7,000
1,34,000 1,34,000
Partners shared profits and losses in the ratio of 4:3:3. Due to differences among the
partners it was decided to wind up the firm, realise the assets and distribute cash among the
partners at the end of each month.
The following realisations were made: -
(i) May 2013 ₹ 15,000 from debtors and ₹ 20,000 by sale of stock. Expenses on
realisation was ₹ 500.
(ii) June 2013 balance of Debtors realised ₹ 10,000. Balance of stock fetched ₹ 24,000.
(iii) August 2013 part of machinery was sold for ₹ 18,000. Expenses incidental to sale
were ₹ 600.
(iv) September 2013 part of machinery valued in the books at ₹ 5,000 was taken by A
in part discharge at an agreed value of ₹ 10,000. Balance of machinery was sold
for ₹ 30,000 (net).
Partners decided to keep a minimum cash balance of ₹ 2,000 in the first 3 months and
₹ 1000 thereafter.
Show how the amounts due to partners will be settled. All workings should form part of
your answer.

Q8. D, E and F were in partnership sharing profits and losses in the ratio 2:1:1. They decided
to dissolve the partnership based on the following balance Sheet:
Liabilities ₹ Assets ₹
Sundry Creditors 5,000 Premises 40,000
Loan (on Mortgage of Premises) 30,000 Debtors 60,000
Loan from D 11,000 Stock 70,000
General Reserve 14,000 Cash 3,000
Partners’ Capital
D 50,000
E 40,000
F 23,000
1,73,000 1,73,000
The assets were realised piecemeal as follows:
June 2013 - ₹ 5,000 received after meeting in full the mortgage loan.
July 2013 – Debtors ₹ 15,000; Stock ₹ 10,000
August 2013 – Debtors ₹ 20,000; Stock ₹ 25,000
September 2013 – Debtors ₹ 17,000; Stock ₹ 23,000 (final)
The remaining stock was taken over by E at an agreed value of ₹ 3,000.
The Sundry Creditors were settled for ₹ 4,000.
The partners decided to distribute cash as and when realised.

Complied By Dipesh Sir

Acharya Marathe college SYBAF

You are required to show the distribution of cash, Applying the “Highest relative capitals”
method.

Q9. Orange, Apple and Mango were in partnership sharing Profit and Losses in the ratio of
3:2:1. They decided to dissolve the partnership and to distribute the sale proceeds are as
and when realised. The Partners capital were: Orange ₹ 10,000, Apple ₹ 9,000 and Mango ₹
5,000. Apple’s Loan (Cr.) amounted to ₹ 3,000.
Sundry creditors amounted to ₹ 6,000.
The assets were realised as under:
Particulars Stock Furniture Debtors Expenses
₹ ₹ ₹ ₹
July 3,000 300 2,000 500
August 2,000 100 1,500 200
September 2,500 - 2,000 300
October 3,000 - 1,500 200
You are required to draw up a statement showing the distribution of cash.

Q10. Given below is the Balance Sheet of A, B & C as on December 31, 2013 on which date
they dissolved their partnership. They shared profits and losses in the ratio of 4:3:3. Since
the realisation of assets was protracted they decided to distribute amounts as and when
feasible and to appoint C for this purpose, who was to get as his remuneration 1% of the
value of the assets (other than cash at bank) realised and 10% of the amount distributed to
the partners.
Balance Sheet of A, B, C as on December 31, 2013
Particulars ₹ Particulars ₹
Partners’ Capital Cash at Bank 275
A 15,000 Sundry Assets 53,725
B 7,500
C 15,000
Sundry Creditors 16,500
54,000 54,000
Assets realised as follows:
₹
First Instalment 16,250
Second Instalment 12,750
Third Instalment 10,000
Final Instalment 7,500
Prepare a statement showing distribution of cash.

Complied By Dipesh Sir