Which of the following method is/are followed for the purpose of piecemeal distribution in the case of dissolution of partnership firm?
1. Proportionate Capital Method
2. Maximum Possible Loss Method
3. Reconstruction and Distribution Method
Select the correct answer for the choices given below:
Which of the following method is/are followed for the purpose of piecemeal distribution in the case of dissolution of partnership firm?
1. Proportionate Capital Method
2. Maximum Possible Loss Method
3. Reconstruction and Distribution Method
Select the correct answer for the choices given below:
The correct option is C 1 and 2
In piecemeal
distribution of cash, there are two methods:
1. Proportionate Capital Method: The partners
whose capitals are more than the proportionate to other partner's capital
should first be refunded so much as to bring down their capitals to
proportionate levels.
2. Maximum Possible Loss Method: An alternative method of
piecemeal distribution is to calculate the maximum possible loss on every
realisation after the outside liabilities and the partner's loan has been
paid.
In piecemeal
distribution of cash, there are two methods:
1. Proportionate Capital Method: The partners
whose capitals are more than the proportionate to other partner's capital
should first be refunded so much as to bring down their capitals to
proportionate levels.
2. Maximum Possible Loss Method: An alternative method of
piecemeal distribution is to calculate the maximum possible loss on every
realisation after the outside liabilities and the partner's loan has been
paid.
