Question

14. At the end of the piecemeal
distribution, Partners Ramesh and Maruti
each have Rs 3,000 capital balances and
share income and losses in a 2:1 ratio,
respectively. Cash equals Rs 1,000, fixed
assets total Rs 10,000 and liabilities are
Rs 5,000. If all the fixed assets are sold
for Rs 7,000, Maruti finally receive cash of
a) Rs 4,667
O b) Rs 1,000
O c) Rs 2,000
O d) Rs 2,333​

Answer 1

Option (b). Maruti will finally receive cash of ₹1,000.

Calculation of Maruti's share of cash:

• When a firm is dissolved, all the assets are sold and all the liabilities are paid off and the resulting profit or loss is shared by the partners in their decided ratio.
• During piecemeal distribution, assets are sold and the cash earned from them is first used to pay the liabilities in a specified order, and then  the remaining is distributed between partners.
• Here cash equals ₹1,000 and fixed assets of ₹10,000 are sold for ₹7,000. So total cash = 1,000 + 7000 = ₹8,000. This cash will be used to pay the liabilities of ₹5,000.
• Total cash remaining after deducting liabilities = 8,000 - 5000 = ₹3,000.
• This cash will be divided between Ramesh and Maruti in the ratio of 2:1.

        Ramesh's share = 3,000 * 2/3 = ₹2,000

        Maruti's share = 3,000 * 1/3 = ₹1,000

• Hence, Maruti will receive cash of ₹1,000