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’.
1. You have decided to sell some goods at a local music festival. You have hired a sales stand for $500. Your cost per item is $3 and you will sell each item for $5. When you did y
#questiondd
What are some critics by individuals and professional bodies in this joint project?
Question: Mada Air Ltd is thinking of diversifying its activities in order to cope with the financial crisis. After careful evaluation its research and development team has pro
Question: Vinak Ltd., which produces three products provides you the following data for 2008-2009.
ACCUMULATION ACCOUNTS FOR MINORS (a) Income accumulations : When property is left in trust for minors, the income earned for the period will be divided equally or according t
Your task in this assignment is to design an asset allocation for the superannuation fund of an individual who is investing to fund his retirement. The asset classes under consider
Q. What do you mean by Fiscal Year? Fiscal Year - Period of 12 consecutive months chosen by an entity as its ACCOUNTING period that may or may not be a calendar year. Fixed Ass
An intersting point to not is that there is a difference in the tax treatment of income from Limitied Liability Companies (LLCs) and Corporations. What is this difference and what
No. Account Title Debit Credit 101 Cash . . . . .
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