Which is the first payment made under piecemeal distribution of cash
Answers
Explanation:
The excess capital (actual capital less capital proportionate to the profit sharing ratio) is paid first. After excess capitals are paid, all capitals are in the profits sharing ratio. Then the payments can be made in the profit sharing ratio.
Excess working capital is the first paid under the piecemeal distribution of cash.
Excess working capital implies that the functioning capital of an organization is higher than the standard. Working capital means how many current resources that surpass the current liabilities of an organization. Since working capital is the core of any business, excess working capital can have genuine ramifications for the monetary wellbeing and functional capacity of firms. This excess cash could be redirected towards more useful angles that can expand the income acquiring capability of the organization.