Piecemeal Distribution of Cash

 

1.      P,Q and R were partners sharing profits in the proportion of ½, ¼ and ¼ respectively.  Their Balance Sheet on the date of dissolution was as follows:

Liabilities

Rs.

Assets

Rs.

Creditors

10,000

Sundry Assets

60,000

P,s Loan

  5,000

Cash

1,000

Q,s Loan

  3,000

 

 

P’s Capital

20,000

 

 

Q’s Capital

15,000

 

 

R’s Capital

  8,000

 

 

 

61,000

 

61,000

The assets realised Rs.65,000, which was received in installments of Rs.15,000; Rs.16,000; Rs.14,000 and Rs.20,000.  Show how the proceeds should be distributed as and when received by the following proportionate Capital Method.

 

 

2.      A, B and C share profits and losses on the proportion of ½: 1/3: 1/6.  Their Balance sheet as on 31-12 1983 was as follows:

Liabilities

Rs,

Assets

Rs.

Creditors

30,000

Cash

4,000

Capital: A

             B

             C

20,000

10,000

2,000

Debtors

Stock

42,000

16,000

 

62,000

 

62,000

They decided to dissolve the firm and agreed to distribute the cash as and when realised. The realisation and expenses are as follows:

Month

Debtors

Stock

Expenses

April

Rs.8,000

Rs.4,000

Rs.1,000

May

12,000

6,000

800

June

7,000

3,000

700

July

10,000

1,000

500

August

2,000

3,500

600

Stock having been completely sold Mr.C accepted to collect the remaining debts Rs.600.    From the details given above, prepare a statement showing the piecemeal distribution of cash.

 

 

3.       A, B, and C were partners sharing profits and losses in the ratio of 2:2:1.  They dissolved their firm on 1-1-1986 when their position was as under:

 Liabilities

Rs.

 

Assets

Rs.

Trade Creditors

40,000

 

Land and Building

50,000

Bills Payable

30,000

 

Plant & Machinery

80,000

Reserves

10,000   

 

Stock-in-trade

60,000

Capital Accounts: 

 

 

Cash in Hand

10,000

A

 

40,000

Profit &Loss A/c

5,000

B

 

60,000

 Sundry Debtors

10,000 

C

 

35,000

 

 

 

 

2,15,000

 

2,15,000

Assets were realised and cash was paid to partners as and when received.   The net cash was available each month as under:

End of February 1986

Rs. 50,000

End of March   1986

Rs.1,20,000

End of June 1986

Rs.40,000

A part of the stock costing Rs.20,000 was taken over by B for R.15,000 for his personal use.    Prepare the statement showing piecemeal distribution of cash among the partners.

 

 

4.      Monika, Sonika and Romika share profits and losses in the proportion of 2:1:1.  Their Balance Sheet is as follows:

Liabilities

Rs.

Assets

Rs.

Sundry creditors

10,000

Plant and Machinery

25,000

Sonika’s Loan

6,000

Stock

15,500

Romika’s Loan

4,000

Furniture

5,500

Reserve fund

8,000

Sundry Debtors

17,000

Contingency Reserve

6,000

Cash in Hand

6,000

Monika’s Capital

20,000

 

 

Sonika’s Capital

10,000

 

 

Romika’s Capital

5,000

 

 

 

69,000

 

69,000

The firm is dissolved and the assets are realised as follows:

1st realisation - Rs.12,000;      2nd realization -Rs.25,000;  3rd realization -   Rs.19,000.

           On the dissolution date, there was a contingent liability of Rs.2000 against the firm, which was settled at Rs.1,500 at the time of 2nd realisation.  Realisation expenses were estimated at Rs.2,000, but these actually amounted to Rs.1,200.  The firm was bound to pay Rs.600 out of third realisation for which no provision was made. Sonika took over stock valued at Rs.1,000 at the time of third realisation.  Prepare a statement showing the distribution of Cash under Surplus capital method.

 

 

5.      East, South and North are in partnership sharing profits and losses in the ratio of 3:2:1.  They decided to dissolve the business on 31-12-1978 on which date their balance sheet was as follows:

Liabilities

Rs.

Assets

Rs

Capital A/c.      East

                      South

                      North

38,700

10,680

11,100

Land & buildings

Motor Car

Investments

      30,810    

5,160

1,080

Loan Account: North

3,000

Stock

19,530

Creditors

10,320

Debtors

11,280

                       

 

         Cash

5,940

 

73,800

 

73,800

The Assets were realised piecemeal as follows and it was agreed that cash should be distributed as and when realised:

15-1-1979                                                                                                                                       Rs.10,380

20-2-1979                                                                                                                                                               Rs.27,900

23-3-1979                                                                                                                                                               Rs.3,600

15-4-1979   North took over investments at a value of           Rs.1,260

27-4-1979                                                                                                                                                               Rs.19,200

Dissolution expenses were originally provided for an estimated amount of Rs.2,700, but the actual amount spent on 29-3-1979 was Rs.1,920.  The creditors were settled for Rs.10,080.   You are required to prepare a statement showing distribution of cash amongst the partners.

 

 

6.      P,Q and R share profits of an firm in the proportions of ½, ¼ and ¼ respectively.  On the dissolution their Balance Sheet stood as follows:

Liabilities 

Rs.

Assets

Rs.

Creditors

10,000

Sundry Assets

60,000

P’s Loan

5,000

Cash in Hand

1,000

Q’s Loan

3,000

 

 

P’S Capital

20,000

 

 

Q’s Capital

15,000

 

 

R’s Capital

8,000

 

 

 

61,000

 

61,000

The assets realised Rs.45,000 which were received in installments of Rs.15,000 Rs.16,000 and Rs.14,000.  Show how the proceeds should be distributed as and when received by following the proportionate capital method.

 

 

7.   Ram, Sham and Rahim are in partnership sharing profits and losses in the ratio of 3:2:1 respectively.  They decided to dissolve the business on 31st Dec 1986 on which their Balance sheet stood as follows:

Liabilities

                 Rs.

Assets

Rs.

Capital

 

Land & Buildings

92,430

Ram

1,16,100

Motor Car

15,480

Sham

32,040

Investments

3,240

Rahim

33,300

Stock

58,590

Ram’s Loan A/c

9,000

Debtors

33,840

Creditors

30,960

Cash in Hand

17,820

 

2,21,400

 

2,21,400

The realisation of Assets is as follows:

16th Jan, 1986                                                                         Rs.31,140

20th Feb, 1986                                                                              83,700

23rd March 1986                                                                           10,800

16th April 1986 Rahim took over Investment at a value of          3,780

27th April 1986                                                                 57,600

Dissolution expenses were originally provided for an estimated amount of Rs.8,100 but the actual amount spent on 29th March 1986 was Rs.5,760.  The Creditors were paid for Rs.30,240 in full settlement .   You are required to prepare a statement showing distribution of cash amongst the partners according to the proportionate capital method.

 

 

8.  Orange, Apple and Banana were in partnership sharing profits and losses in the ratio of 3:2:1.  They decided to dissolve the partnership and to distribute the sale proceeds as and when realised.

The partner’s capitals were: Orange Rs.10,000; Apple Rs.9,000 and Banana Rs.5,000.  Apple’s loan (Cr.) amounted to Rs.3,000.  Sundry creditors amounted to Rs.6,000.

The assets were realised as under:

 

Stock

Furniture

Debtors

Expenses

July

Rs.3,000

Rs.300

Rs.2,000

Rs.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.

 

 

  1.  Lamb, Deer and Peacock were in partnership, their respective share being ½, ¼ and ¼.  The following was their Balance Sheet on December 31, 1974 on which date they decided to dissolve the firm.

Liabilities

Rs.

Assets

Rs.

Creditors

15,000

Cash

9,000

Income- tax payable

4,000

Stock

40,000

Loan from Bank (Secured of stock )

30,000

Debtors

60,000

Deer’s Loan

11,000

Furniture

36,000

Capital Accounts:  Lamb

 40,000

Motor Car

25,000

                               Deer

40,000

 

 

                               Peacock

30,000

 

 

 

1,70,000

 

1,70,000

Bank could realise only Rs.25,000 on disposal of stock .  A sum of Rs.3,000 was spent for furniture, for getting better price.  Other assets were realised as follows:

January 1975                                             Rs.12,000

February 1975                                                 15,000

March  1975                                                    10,000

April     1975                                                    30,000

May      1975                                                    35,000

The partners distributed the cash as and when available.  Show the distribution of cash on the basis of ‘ highest relative capitals’.

 

 

  1. K, L and M are partners who share profits in the ratio of 3:2:1.   

Their Balance sheet  on 31/12/87 was under :-

Capital: K:

Rs.30,000

Sundry Assets

Rs.2,00,000

              L:

50,000

 

 

             M:  

50,000

 

 

Creditors

70,000

 

 

 

2,00,000

 

2,00,000

The firm dissolved and the assets realised as follows: First realisation Rs.50,000; Second realisation Rs.30,000; Third realisation Rs.60,000; Fourth Reaslisation Rs.30,000 and Final realisation Rs.15,000.    Prepare the statement showing the piecemeal distribution of cash under Maximum Loss Method.

 

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