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a) Admission of a partner
b) Retirement of a partner
c) Death of a partner
d) Insolvency of a partner
a) Admission of new partner.............................
a) Admission of a partner
When a new partner comes into the business, old partners have to give him his profit share from their portion. Thus change in profit sharing ratio is an important aspect to be considered on reconstitution by admission. The existing partners may decide to change their profit sharing ratio for various reasons. When the profit sharing ratio is revised among existing partners, there ought to be a partial sacrifice of profit share by some partners in favour of others. The sacrifice of one or a group of partners becomes the gain of the remaining partners. Following is the formula for calculating sacrificing ratio:
Sacrificing ratio = Old ratio – new ratio
Admission of New Partner is correct................
Option A is correct! Sometime the words indicate the story!
B retirement of a partner.
Option- A, Admission of new partner
I believe A is the right answer.
a) Admission of a New Partner
