Statement of surplus capital-partnership, Financial Accounting

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Statement of surplus capital

	A (Sh)	B (Sh)	C (Sh)	Total (Sh)
Capitals (1)	X	X	X	X
Profit sharing ratio (2)	X	X	X	X
capital per unit of profit (1) ¸ (2)	X	X	X	X
Capital in profit sharing ratio (3)	(X)	(X)	(X)	(X)
Surplus Capital (1) – (3)	X	-	X	X

Capitals	X	-	X	X
Profit sharing ratio	X	-	X	X
Capital per unit of profit	X	-	X	X
Capital in profit sharing ratio	(X)	-	(X)	(X)
Surplus Capital	-	-	X	X

The table is repeated again and again until only one partner has surplus surplus capital. Every consecutive table eliminates one partner.

Another table known as ‘statement of actual distribution’ is now necessary to ascertain the amount from each collection to be paid to individual partners. It will take the following form:

	A (Sh)	B (Sh)	C (Sh)	Total (Sh)
Capitals (1)	X	X	X	X
Profit sharing ratio (2)	X	X	X	X
Capital per unit of profit (1) ¸ (2)	X	X	X	X
Capital in profit sharing ratio (3)	(X)	(X)	(X)	(X)
Surplus Capital (1) – (3)	X	-	X	X

Capitals	X	-	X	X
Profit sharing ratio	X	-	X	X
Capital per unit of profit	X	-	X	X
Capital in profit sharing ratio	(X)	-	(X)	(X)
Surplus Capital	-	-	X	X

1) The surplus as per the last section in the statement of surplus capital is the first to be paid off.
2) If the cash collected is sufficient to pay off the entire surplus and some excess remains, such excess is used to pay the surplus in the last but one section of the statement of surplus capital.
3) Cash collected is used to settle any outstanding balances on the last but one section of the statement of surplus capital.
4) From this point on all cash is divided amongst all partners in profit sharing ratio.

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