The document discusses the concept of piecemeal distribution of cash in the dissolution of a partnership firm. It provides an example calculation showing the distribution of cash to creditors, bills payable, and partner capital accounts in installments until all liabilities are settled and any surplus capital is distributed. The calculation determines surplus capital amounts for each partner, then makes incremental cash distributions, tracking amounts paid to creditors versus distributed to partner capital, until the final distribution leaves any realization loss amounts.

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

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

4. 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 0 5000
Taking the Base of ‘A’ (Rs. 3000) 9000 0 3000
Balance 0 0 2000
First Surplus ‘R’ Rs. 2000
Second Surplus ‘A’ & ‘R’ Rs. 9000 & 3000 each

5. 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 0 0 0
Balance 0 87000 29000 69000 40000 25000
First Instalment Rs. 65000
Less: Paid to Creditors and Bills
Payable (3:1)
65000 48750 16250 0 0 0
Balance 0 38250 12750 69000 40000 25000
Second Instalment Rs. 52000
Less : Paid to Creditors & Bills
Payable in full
51000 38250 12750 0 0 0
Balance 1000 0 0 69000 40000 25000

6. Statement of Piecemeal Distribution of Cash
Particulars Cash Creditors
Bills
Payable
Capital
A
Capital
M
Capital
R
Balance as per Balance Sheet 1000 0 0 69000 40000 25000
Less : Paid to ‘R’ (First Surplus) 1000 0 0 0 0 1000
Balance 0 0 0 69000 40000 24000
Third Instalment Rs. 68000
Add: Unused Realization Expenses 2000
Balance 70000
Less : Paid to ‘R’ (Balance of first
instalment
1000 0 0 0 0 1000
Balance 69000 0 0 69000 40000 23000
Less : Paid to ‘A’ & ‘R’ (Second
Surplus) (Rs. 9000 & Rs.3000)
12000 0 0 9000 0 3000
Balance 57000 0 0 60000 40000 20000
Less: Paid to All in their PSR 57000 0 0 28500 19000 9500
Balance 0 0 0 31500 21000 10500
Realization Loss 31500 21000 10500

7. Thank you