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’.
Who are the users of accounting information? For accounting information to be useful, accountant should be clear for whom the information is being prepared and for what purpose
1.) Assume a $1000 face value bond has a coupon rate of 8.5 percent, pays interest semi-annually, and has an eight-year life. If investors are willing to accept a 10.25 percent rat
effects of public debt on production, d
From the end of January to the end of December 2010, the XYZ Company experienced the following changes in its assets and liabilities of interest: the company achieved a saving posi
Sema pic, a company in the heavy engineering industry, carried out an expansion programme in the 2016 financial year, in order to meet a permanent increase in contracts. The compan
why frog respire through skin
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
Accounting objectives Accounting has two main objectives: To assist control over the assets and liabilities, and the income and expenditure of the enterprise; and To
On December 31, 2014, Santana Company has $7,194,600 of short-term debt in the form of notes payable to Golden State Bank due in 2015. On January 28, 2015, Santana enters into a re
PROOF OF DEBTS The following rules apply as to the proving of debts: 1) A creditor has no right to vote or receive dividends until his debt is proved to the satisfaction of th
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