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CMA Intermediate · Financial Accounting · Dissolution of Partnership Firms including Piecemeal Distribution

X, Y and Z share profits in the ratio 3:2:1 and their adjusted capitals are X Rs 1,20,000, Y Rs 70,000 and Z Rs 30,000. In the first instalment Rs 52,000 is paid to partners under the highest relative capital method. The remaining assets then realise Rs 1,20,000 in total, with no further expenses, and this is distributed finally. How much does X receive in the final payment?

X receives Rs 60,000. After the first instalment of Rs 52,000, the capital balances are X 84,000, Y 56,000 and Z 28,000. These total Rs 1,68,000 against Rs 1,20,000 realised, so the Rs 48,000 loss is shared 3:2:1. X bears Rs 24,000 and receives Rs 60,000.

  1. ARs 60,000Correct
  2. BRs 84,000
  3. CRs 72,000
  4. DRs 40,000

Explanation

Relative capitals are X 40,000, Y 35,000, Z 30,000. First instalment: X gets 5,000 x 3 = 15,000. Then X and Y (5 units) are reduced by 5,000 per unit, so X gets 15,000 and Y 10,000. The remaining 12,000 is shared 3:2:1, giving X 6,000, Y 4,000, Z 2,000. Balances are X 84,000, Y 56,000, Z 28,000, a total of 1,68,000. Against Rs 1,20,000 realised, the loss of Rs 48,000 is shared 3:2:1, so X bears Rs 24,000 and receives Rs 60,000. Rs 84,000 ignores the loss.

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