Accountancy

SOLUTION The partners whose shares have increased as a result of change in profit-sharing ratio are called ‘Gaining Partners'.

SOLUTION Gaining Ratio = New Ratio - Old Ratio.

SOLUTION The ratio in which one or more partners gain some portion of other partners share of profit is called gaining ratio. It is calculated by deducting old ratio from…

SOLUTION (i) At the time of admission of a new partner; (ii) At the time of change in profit-sharing ratio of existing partners.

SOLUTION The partners whose shares have decreased as a result of change in profit-sharing ratio are called 'Sacrificing Partners’.

SOLUTION Sacrificing Ratio = Old Ratio - New Ratio.

SOLUTION The ratio in which one or more of the existing partners surrender some of their old share in favour of one or more of other partners is called sacrificing…

SOLUTION A change in profit sharing ratio implies purchase of share of profit by one or more partners from other partner or partners.

SOLUTION In addition to admission, retirement and death of a partner, the need for valuation of goodwill may arise in the following circumstances:(i) Change in the profit-sharing ratio amongst the existing…