The following is the Balance Sheet of X, Y, Z on 31st December, 2025 when they decided to dissolve the partnership. They share profits in the ratio…

Statement showing Realization of Cash Sr. No. Particulars Realization Creditors Partner's Loan Partner's Capital 1 After taking into account cash balance and amount set aside for expenses 1,500 1,500 - - 2 4,500 1,500 3,000 3 5,850 - 4,500 1,350 4 9,000 - 9,000 Including Savings in Exp 30,150 - 30,150 51,000 3,000 7,500 40,500 To ascertain the amount distributable out of each installment realized among the partners, the following table will be constructed: Statement of Distribution on Capital Accounts (1) Calculation to determine the mode of distribution of ₹ 1,350 Particulars Total X Y Z Balance 63,000 22,500 27,000 13,500 Less: Maximum Loss in 2:2:1 (61,650) (24,660) (24,660) (12,330) +1,350 -2,160 +2,340 +1,170 Deficiency of X's capital written off against those of Y and Z in the ratio of their capital 27,000: 13,500, (Garner vs. Murray) (1,440) (720) Manner in which the first ₹ 1,350 should be distributed + 900 + 450 (2) Distribution of ₹ 9,000 Balance after (1) 61,650 22,500 26,100 13,050 Less: Maximum Loss in 2:2:1 (52,650) (21,060) (21,060) (10,530) Balance available and distributed 9,000 1,440 5,040 2,520 (3) Distribution of ₹ 30,150 Balance after (2) 52,650 21,060 21,060 10,530 Less: Maximum Loss in 2:2:1 (22,500) (9,000) (9,000) (4,500) Distribution of 30,150 30,150 12,060 12,060 6,030 Summary: Balance 63,000 22,500 27,000 13,500 Total Amounts Paid 40,500 13,500 18,000 9,000 Loss 22,500 9,000 9,000 4,500