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’.
A business had always made a provision for doubtful debts at the rate of 5% of debtors. On 1 January 2017 the provision for doubtful debts brought forward from the previous year wa
Explain the movements in working capital in terms of a business''s cash cycle. Explain some of the options available and their effect on the cash cycle.
Effect of discharge An order of discharge releases the bankrupt from all disabilities imposed by the bankruptcy (except those which apply for a fixed period after discharge - s
THE PETITION Petition by debtor : If the debtor presents his own petition, a receiving order is made at once without a court hearing and an adjudication order may also be ma
how can i do?
fimnancial accounting system
Illustration of double entry The balances on the current accounts of a head office and branch were Ksh 698,000, before the transactions listed below: Normal 0
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
Wendy is evaluating a capital budgeting project that should last for 4 years. The project requires $ 800,000 of equipment. She is unsure what depreciation method to use in her anal
The Brownstone Corporation's bonds have 7 years remaining to maturity. Interest is paid yearly, the bonds have a $1,000 par value, and the coupon interest rate is 10%. a.
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