Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
THE SURPLUS CAPITAL METHOD
Under this method, the initial amounts repaid to partners are in order to reduce their capitals to amounts such that these are now in the same ratio as that in which they share profits and losses. The amounts so repaid are referred to as “repayment of surplus capital”.For example, if there are three partners who share profits and losses equally, and have capitals of Ksh 100,000 Ksh 60,000 and Ksh 40,000, the surplus capitals will be as follows:
Once the surplus capital has been paid to partners the remaining capital, known as ‘base capital’ can be repaid. The base capital is in the same ratio as that in which profits and losses are shared. In the illustration, it is 1:1:1(equal). Any cash collected can also be distributed in profit sharing ration – 1:1:1. This will allow capital balances to fall uniformly as more and more cash is paid to partners.As a final example to this, assume that there are three partners with capitals of Ksh 60,000, Ksh 75,000 and Ksh 120,000 who share profits and losses in the ratio 3:2:1 respectively. Their surplus capitals can be illustrated as follows:
Of course, there will be a priority payment of surplus capital between the two partners who have surplus capital. The partner who will receive the first payment is said to have been repaid his ‘surplus surplus capital’.
Refer to Note 12, Employee Benefit Plans and Other Postretirement Benefits (pp. 86-91) from the Consolidated Financial Statements of Harley-Davidson (hereafter HOG) 2008 Annual Rep
Group retained profits Retained profits ideally should be the amounts that can be distributed as dividends. Therefore, in arriving at group retained profits, careful attention s
Prove that accounting equation is satisfied in all the following transactions of Mr.X 1. Commenced business with cash - Rs.80,000 2. Pu
It is the month of april for rand company a producer of gold and silver commemorative medallions. Rand company has one job, job A a special minting of 1000 gold medallions which st
Calculation of Efficiency ratios - 2008 2009 2010 M Net Sales
hello, i have got my answer, but i don''t know the PART C why doesn''t calculate "working capital: 60000"?????? can not find match number in the solution table
Illustration of consolidated cashflow statements The voice of the Nation Limited is a Nairobi based media company. Its Consolidated Income Statement for the year ended 30 April
Q. Explain the Auditing Standards? Auditing Standards - Guidelines to which an AUDITOR adheres. Auditing standards encompassauditor's professional qualities, as well as her or
Archer Daniels Midland Company is considering buying a new farm that it plans to operate for 10 years. The farm will require an initial investment of $12.00 million. This investm
Business start up accounting transactions: Jane Whitfield, a sole proprietor, established the JW Flower Shop on January 2, 2010. The following transactions have occurred during
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd