ESWARI

3. PIECEMEAL DISTRIBUTION:
1.While solving various problems on dissolution of a partnership firm, it has been
assumed that all the assets are realized immediately on the date of dissolution and
all liabilities are paid off on the same date.
2. similarly in the liabilities are paid off gradually depending upon amount realized
from the sale of assets.
3. when the partners are not able to get their capital immediately.
4.They will have to suffer a lot due to financial problem, they should paid as and4.They will have to suffer a lot due to financial problem, they should paid as and
when the firm has funds left with it after payment of all outside liabilities.
When assets are realized gradually, the following order adopted :
(a) Payment to creditors and other external liabilities.
(b) Payment of partners loan ratably.
(c) If any amount remains after making above payment ,this is utilized in payment
to partners of capital to the partners.

4. While making payment to partners , the following two methods may be adopted.
(a) Proportionate capital/ surplus capital method
(b) Maximum loss method
(a)Proportionate capital/ surplus capital method:
Under this method , the amount payable to partners whose capitals are
relatively in excess of their profit sharing ratio is calculated .
This should be done by dividing each partners capital by the respective profit
sharing ratio. When all the realizations have been distributed , the unpaidsharing ratio. When all the realizations have been distributed , the unpaid
balance of capital will represent loss on realization.
(b) Maximum loss method :
Under the method , it is assumed that at each stage of realisation of assets
the remaining unrealized assets are worthless.
In other words , at every stage of realisation , it is presumed that there would
be no further realisation.
The maximum loss is calculated at every stage of realisation and distributed
among the partners in their profit sharing ratio.