Ram, Rahim and Robert share profits and losses in the ratio of 4:2:1. They decide to dissolve the partnership and their Balance Sheet as on the date of dissolution was as follows:
|
Liabilities |
Rs |
Assets |
Rs |
|
Trade Creditors |
17,100 |
Land and Buildings |
2,87,160 |
|
Bank Overdraft |
48,750 |
Plant and Machinery |
48,900 |
|
General Reserve |
28,350 |
Furniture |
7,380 |
|
Capital: |
Investments |
45,000 |
|
|
Ram 1,20,000 |
Stock |
1,92,450 |
|
|
Rahim 2,40,000 |
Trade Debtors |
68,100 |
|
|
Robert 1,95,000 |
5,55,000 |
Cash in Hand |
210 |
|
6,49,200 |
6,49,200 |
The partners also decide that after the creditors have all been paid and providing a sum of Rs 3,600 to meet payable expenses of realisation and dissolution, all cash realised should immediately be divided among them. The assets are realised as follows: first realisation – Rs 46,080; second realisation Rs 55,200; third realisation: 2,89,197; final realisation – Rs 1,68,900. Expenses of realisation and dissolution amount to Rs 3,396. Prepare a statement showing how cash should be distributed among the partners according to Maximum Loss Method.