Piecemeal Distribution of Cash

Preparation of Piecemeal Distribution of Cash under Dissolution of a Partnership Firm.

1. Dissolution of a Partnership Firm Piecemeal Distribution of Cash Dr. Yashodhan Mithare

2. Learning Objectives To understand the concept of ‘Piecemeal Distribution of cash’. To understand calculation of ‘Surplus Capital’ To understand the treatment of estimation and actual payment of realization expenses To understand preparation of statement of piecemeal distribution of cash.

3. Statement of Surplus Capital Particulars Capital A (3) Capital M (2) Capital R (1) Balance as per Balance Sheet 69000 40000 25000 Taking the base of ‘M’ (Rs. 20000) 60000 40000 20000 Balance 9000 5000 Taking the Base of ‘A’ (Rs. 3000) 9000 3000 Balance 2000 First Surplus ‘R’ Rs. 2000 Second Surplus ‘A’ & ‘R’ Rs . 9000 & 3000 each

4. Statement of Piecemeal Distribution of Cash Particulars Cash Creditors Bills Payable Capital A Capital M Capital R Balance as per Balance Sheet 16000 90000 30000 69000 40000 25000 Less : Estimated Realization Expenses 12000 Balance 4000 90000 30000 69000 40000 25000 Less : Paid to Creditors & Bills Payable ( 3 : 1 ) 4000 3000 1000 Balance 87000 29000 69000 40000 25000 First Instalment Rs . 65000 Less : Paid to Creditors and Bills Payable ( 3 : 1 ) 65000 48750 16250 Balance 38250 12750 69000 40000 25000 Second Instalment Rs . 52000 Less : Paid to Creditors & Bills Payable in full 51000 38250 12750 Balance 1000 69000 40000 25000

5. Statement of Piecemeal Distribution of Cash Particulars Cash Creditors Bills Payable Capital A Capital M Capital R Balance as per Balance Sheet 1000 69000 40000 25000 Less : Paid to ‘R’ (First Surplus) 1000 1000 Balance 69000 40000 24000 Third Instalment Rs . 68000 Add : Unused Realization Expenses 2000 Balance 70000 Less : Paid to ‘R’ (Balance of first instalment 1000 1000 Balance 69000 69000 40000 23000 Less : Paid to ‘A’ & ‘R’ (Second Surplus) (Rs . 9000 & Rs . 3000 ) 12000 9000 3000 Balance 57000 60000 40000 20000 Less : Paid to All in their PSR 57000 28500 19000 9500 Balance 31500 21000 10500 Realization Loss 31500 21000 10500

6. Thank you