Question

In a piecemeal distribution, when a partnership is dissolved, the assets are sold and the cash realized is applied first to the:​

Answer 1

Explanation:

In piecemeal distribution of cash, there are  methods:

1. Proportionate Capital Method: The companions whose capitals are greater than the proportionate to different partner's capital have to first be refunded a lot as to deliver down their capitals to proportionate levels.

2. Maximum Loss Method: An opportunity approach of piecemeal distribution is to calculate the most viable loss on each realisation after the outdoor liabilities and the partner's mortgage has been paid.