Basic Concepts
For finding unit value capital is divided by
Profit Sharing Ratio
Government dues are ____ Liabilities
Preferential Liabilities
Why do we prepare statement of excess capital?
Generally capital balances of partners are not in PSR and to make it in that proportion Sta. of excess capital is prepared. Otherwise the Profit/loss on realization will not be in PSR.
State the order of payment of Liabilities in piecemeal distribution
Secured Creditors
Preferential creditors
Unsecured creditors
Internal liability
Partners capital
A firm has the following liabilities:
Creditors Rs. 30000; Loan from partner L Rs. 6000 & loan from Partner Q Rs. 4000. State the order of payment
1st--> Creditors Rs. 30000
2nd --> partner L & Partner Q in the ratio 6:4
Which partners unit value will be taken as base
Partner with lowest unit value
Partners loan is a ____ liability?
Internal
East, West and South are partners sharing in the ratio of 3 : 3 : 2. Their capitals are Rs. 24,000, Rs. 15,000 & Rs. 9,000 respectively. Which partner has ultimate excess capital?
East Rs. 9000
If Bank loan is Rs. 50000; Bank overdraft is Rs. 25000, Bills Payable is Rs. 15000, Creditors Rs. 10000. Bank loan is secured against land & Building; Bank overdraft against stock.
Assets realized are Rs. 50000 (Bills Receivable) What will be the order of payment?
Payment will be in the ratio of 10:5:3:2.
Bank loan is Rs. 25000; Bank overdraft is Rs. 12500, Bills Payable is Rs. 7500, Creditors Rs. 5000.
On the date of dissolution a firm has Fixed assets Rs. 4500000. The realization exp amount to Rs. 200000. Amounts realized are:
1st- Rs. 500000, 2nd Rs. 1500000, 3rd Rs. 300000. The amount available for the first piecemeal distribution is....
Rs. 300000
What treatment will you give if a liability is taken over by a partner?
Added to the capital of a partner
What treatment is given to reserves and undistributed profits?
Divided among partners in PSR
Red, White & Blue are partners sharing profits & losses in the ratio 5:3:2. Their capitals are 45000, 12000 and 43000 respectively. Reserves amounted to Rs. 10000.
Ultimate excess capital will be?
Blue --> Rs. 25000
The amount left unpaid on partners capital should be in which ratio?
Profit Sharing ratio
A bank loan of Rs. 100000 is secured against Stock of value Rs. 50000. The amount realized from stock is Rs. 60000. What will be the balance amount and how will it be treated?
Unsecured creditors Rs. 40000
If sufficient cash is not available for payment, the payment will be made on which basis?
Proportionately
The amount due to employees is ____ liability
Preferential
Partner A B C
Capital 67000 45000 31500
Loan to partner 12000 7500 Nil
PSR 5 3 2
Whose capital will be taken as base capital initially?
Partner A
liabilities given are creditors Rs. 10000, Bills payable Rs. 5000, outstanding exp Rs. 10000, loan Rs. 5000.
Cash available is Rs. 15000. What amount will be paid & in which order?
creditors Rs. 5000, Bills payable Rs. 2500, outstanding exp Rs. 5000, loan Rs. 2500 in the ratio 2:1:2:1
Cash available in hand is Rs. 500000
Bills payable Rs. 20000, Taxes Rs. 100000, Creditors Rs. 200000 Loan from partner A Rs. 80000, Loan from partner B Rs. 160000.
What amount will be left unpaid, if any?
Loan from Partner A Rs. 20000
loan from Partner B Rs. 40000
When there are four partners excess capital has to be computed how may times?
Three
When the amount realized from assets is not sufficient to pay fully the firms liabilities, the deficiency will be borne by _____ in _____ ratio.
Partners Profit Sharing ratio
Partner A B C
Capital 67000 45000 31500
Drawings 12000 7500 Nil
PSR 5 3 2
State the order of payment.
Partner C 6500
Partner B 4500; Partner C 3000
Balance to all in PSR
Cash available in hand is Rs. 90000
Creditors Rs. 40000, Bank loan Rs. 25000; Realization exp Rs. 10000; partners loan Rs. 7000.
What will be the order of payment of liability? Will there be any unpaid liablity left? If yes what amount?
Realization exp
creditors, Bank loan
Partners loan
Cash balance will be Rs. 8000
Provision for realization exp was to be created at Rs. 1600. Amount received in Last realization is Rs. 153400. The outstanding capital balances of partners X, Y & Z were Rs. 200000, Rs. 160000, Rs. 80000 respectively. The actual realization exp amounted to Rs. 1000 only. Calculate the loss on realization.
Loss on realization is Rs. 130000, Rs. 104000 & Rs. 52000 for X, Y & Z respectively.