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’.
Since 1968, Dracula Limited has traded in Doncaster, South Yorkshire as a manufacturer of fancy-dress and theatrical costumes. It produces a wide range of general theatrical costum
Question: Mosman Ltd produces a single product. The projected sales for the first month of the coming year and the beginning and ending inventory data are as follows:
Exceptions to the rule of lapse There is no lapse in either of the following cases: 1. Where the gift or disposition is made in discharge of a moral obligation recognised by t
Using the profitability index, which of the following projects should be accepted? Project M: NPV = $60,000 NINV = $200,000 Project N: NPV = $10,000 NINV = $
define law including contract and bankruptcy
Statement of Cash Flows - A statement of cash flows is one of the fundamental financial statements which is required as part of a complete set of financial statements prepared in c
Q. What is Inheritance in Gross income? Inheritance - As distinguished from a BEQUEST or devise, an inheritance is property attained through laws of descent and distribution fr
CONSOLIDATED CASHFLOW STATEMENTS (IAS 7) The basic cash flow statement has been covered under Financial Accounting II. The following introduction will serve as a quick reminder.
Characteristics of a will 1) Dispositionary: A will disposes the deceased’s property. 2) Formality: For a will to be valid, it must be written and signed by the d
How do I know how much is service fee ?
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