PIECEMEAL DISTRIBUTION OF CASH

1. X, Y and Z are partners sharing profits & losses in the ratio of 3:2:1. Their Capital Balances are
Rs.1,20,000, Rs. 96,000 and Rs.60,000 respectively. Determine excess capital.

2. The following is the balance sheet of M/s. X, Y and Z who share the profits and losses in the ratio of 2:2:1.
Liabilities Rs Assets Rs.
Sundry Creditors 15,000 Cash on Hand 2,000
Capitals : X 15,000 Sundry Debtors 22,000
Y 12,000 Stock 22,000
Z 4,000 –
46,000 46,000

The firm is dissolved and the assets realised gradually. Rs. 10,000 are received once Rs. 15,000 another
time and Rs. 9,000 finally.
Prepare a statement of excess capital.

3. The following is the balance sheet of X, Y and Z who were sharing profits and losses in the ratio of 5:3:2.
Balance Sheet as at 31-3-2017
Liabilities Rs. Assets Rs.
Creditors 1,00,000 Building 80,000
Capital Accounts : Machinery 40,000
X 94,000 Furniture 50,000
Y 66,000 Stock 90,000
Z 60,000 Debtors 60,000
3,20,000 3,20,000
It was decided to dissolve the firm. The assets were realised as under and the payments were made as and
when realised :
1-4-2017 Rs. 60,000 15-4-2017 Rs. 40,000
1-5-2017 Rs. 96,000 28-5-2017 Rs.1,04,000
Prepare the statement showing distribution of cash.

4. Silver, Tungsten and Molybdenum were in partnership till 31.3.2017; when their Balance Sheet was as
1 1 1
follows. They shared Profits & Losses as , & respectively :
2 3 6
Balance Sheet
Liabilities Rs. Assets `Rs.
Sundry Creditors 16,000 Plant & Machinery 2,00,000
Bank Overdraft Stock 75,000
(against Pledge of Stock) 70,000 Sundry Debtors 1,25,000
Tungsten's Loan 50,000 Cash 5,000
General Reserve 15,000
Capital Accounts :
Silver 1,54,000
Tungsten 50,000
Molybdenum 50,000 2,54,000 -
4,05,000 4,05,000

Bankers could realise only Rs. 68,000 on sale of pledged Stock. Other Assets were realised as follows :
May 2017 Plant & Machinery realised Rs.1,75,000 after meeting Brokerage Rs.5,000.
June 2017 Debtors realised Rs. 75,000.
 July 2017 Debtors realised Rs. 15,000.
The remaining Debtors were taken over for Rs. 5,000 by Molybdenum who contributed the said amount in
Cash.
A sum of Rs. 2,500 was kept reserved for meeting realisation expenses and actual expenses of Rs.2,000
were met finally on 15th July, 2017. A Creditor for Rs. 8,000 agreed to forego Rs.2,000 while claim of an
unrecorded Creditor for Rs. 1,000 had to be admitted. The partners decide to distribute Cash as and when
realised.
You are required to show the distribution of cash on the basis of "highest relative Capital".

5. A, B and C were partners sharing profit & losses in the ratio of 1 : 1 : 2 respectively. Their Balance Sheet
was as follows :
Balance Sheet
as on 31st March, 2017
Liabilities Rs. Assets Rs.
Capitals Buildings 19,750
A 12,000 Plant and Machinery 11,750
B 9,000 Stock 6,250
C 6,000 27,000
A's Loan 3,750
B's Loan 2,500 6,250
Creditors 3,000
Govt. Taxes 1,500 -
37,750 37,750

A Bills payable of Rs.2,000 maturing on 10th April, 2017 was dishonoured by the firm. It was mutually
agreed that the realisation of assets should be distributed at the end of each month. The monthwise
realisation and expenses was as follows :
2017 Assets Realised ` Expenses of Realisation `
th
30 April 7,360 360
31st May 9,100 350
30th June 7,800 300
31st July 4,780 280
All the assets were fully realised by 31 st July, 2017. The Bills Payable dishonoured was duly met by the
firm on 30th April, 2017.
Prepare a statement of piecemeal distribution of cash.

4 5 1
6. A, B and C share profits and losses in the proportion of , and . Their Balance Sheet as on
10 10 10
31st March, 2017; was as follows :
Balance Sheet
Liabilities Rs. Assets Rs.
Sundry Creditors 10,000 Cash in hand 3,000
A's Loan 6,000 Other Assets 56,000
B's Loan 3,000
Reserve fund 6,000
Contingency Reserve 4,000
Capital A/cs :
A 15,000
B 12,000
C 3,000 -
59,000 59,000
The partnership is dissolved and the assets are realised as follows :
Rs.
First Realisation 10,000
Second Realisation 20,000
Third Realisation 17,000
 On the date of dissolution, there was contingent liability of Rs.1,000 against the firm which was settled at
Rs.700 at the time of second realisation. Realisation expenses were estimated at Rs.2,000 but actually came
to Rs.1,500. C took stock worth Rs.500 at the time of third realisation.
Prepare a statement showing how the distribution should be made by following proportionate capital
method.

7. The Balance Sheet of the firm of A, B and C as on 31st March, 2017 was as under :
Liabilities Rs. Assets Rs.
Creditors 17,000 Cash at Bank 6,000
Capital Accounts : Debtors 22,000
A 67,000 Stock 14,000
B 45,000 Plant & Equipment 99,000
C 31,500 Loan A 12,000
- Loan B 7,500
1,60,500 1,60,500
i) The partners share profits & losses in the ratio of 5 : 3 : 2.
ii) Cash is distributed among the partners at the end of each month.
iii) Liquidation transactions :
April, 2017 :
Rs. 16,500 Collected from debtors, balance is collectable.
Rs.10,000 Received from sale of entire stock.
Rs.1,000 Liquidation expenses paid.
Rs.8,000 Cash retained in the business at the end of the month.
May, 2017 :
Rs. 1,500 Liquidation expenses paid.
As part of payment of his capital, C accepted a piece of equipment for Rs.10,000
(B.V. Rs.4,000).
Rs. 2,500 Cash retained in the business at the end of the month.
June, 2017 :
Rs.75,000 Received on sale of remaining plant and equipment.
Rs. 1,000 Liquidation expenses paid. No cash is retained in the business.
Prepare a statement of piecemeal distribution of cash.

8. Ajay Enterprises, a Partnership firm in which A, B and C are three partners sharing profits and losses in
the ratio of 4:3:3, the balance sheet if the firm as on 31stMarch 2017 is as below :
Liabilities Rs. Assets Rs.
A’s Capital 15,000 Factory Building 24,160
B’s Capital 7,500 Plant and Machinery 16,275
C’s Capital 15,000 Debtors 5,400
B’s Loan A/c 4,500 Stock 12,390
Sundry Creditors 16,500 Cash at Bank 275
58,500 58,500
On balance sheet data all the three partners have decided to dissolve their partnership. Since the realization
of assets was protracted, they decide to distribute amounts as and when feasible and for this purpose they
appoint C who was to get as his remunerations 1% of the value of the assets realized other than cash at
Bank and 10% of the amount distributed to the partners.
Assets were realized price meal as under :
Particulars Rs.
First Instalment 18,650
Second Instalment 17,320
Third Instalment 10,000
 Last Instalment 7,000
Dissolution expenses were provided for estmated amount of 3,000
The creditors were settled finally for 15,900
Required : Prepare a statement showing distribution of cash amongst the partners by ‘Highest Relative
Capital Method’.

1 1 1
9. Lata, Usha and Meena were in partnership, sharing profits and losses in the ratio of , and
2 3 6
respectively. Their firm was dissolved as on 31st March, 2017 on which date the Balance Sheet of the firm
was as under :
Balance Sheet as at 31st March, 2017
Liabilities Rs Assets Rs
Capitals : Cash 4,000
Lata 17,000 Debtors 42,000
Usha 8,000 Stock 16,000
Meena 1,000
General Reserve 6,000
Loans :
Lata 6,000
Usha 4,000
Creditors 20,000 -
62,000 62,000
It was agreed that the net realization should be distributed in their due order at the end of each fortnight.
The realisations and expenses were as under :
Debtors Stock Expenses
Rs Rs Rs.
15thApril, 2017 7,500 4,500 1,000
30th April, 2017 10,500 500 500
15thMay, 2017 8,500 8,500 1,000
28thMay, 2017 10,500 500 400
15thJune, 2017 2,050 3,050 600
Stock was completely disposed of and the remaining debtors were to be taken over by Meena at an agreed
amount of Rs.600.
Showthestatementofdistribution ofcash,followingHighestRelativeCapitalsMethod.