Accountancy

SOLUTION Share of profit of the new partner is decided mutually among the old partners and the new partner.

SOLUTION According to Section 31 of Indian Partnership Act, 1932, a person can be admitted as a new partner only with the consent of all the existing partners.

SOLUTION Revaluation A/c                                 Dr. To Sundry Liabilities(Unrecorded liability now recorded)

SOLUTION Sundry Assets                       Dr.    To Revaluation A/c(Unrecorded assets recorded)

SOLUTION These belong to old partners. As such, these should be distributed amongthem.

SOLUTION Revaluation Account is a nominal account in nature.

SOLUTION Yes. Because the profit or loss on revaluation should by credited or debited to the accounts of the partners in their old profit-sharing ratio.

SOLUTION Yes. Because the gaining partner will be acquiring a part of future profits which otherwise would belong to the sacrificing partner. Hence, the gaining partner must compensate the sacrificing…

SOLUTION Average profit is the average of the profits of past few years whereas superprofit is the excess of average profits over normal profits.