Question

explain adjustment of capit in profit sharing ratio​

Answer 1

Answer:

Sometimes, at the time of admission, the partners agree that their capitals should also be adjusted so as to be proportionate to their profit sharing ratio. In such a situation, if the capital of the new partner is given, the same can be used as a base for calculating the new capitals of the old partners.

Answer 2

Answer:

the capital rearrangement means the contribution of partners towards capitals are rearranged on the basis of profit sharing ratio.for this purpose,the capital accounts of old partners must first be adjusted with goodwill, revolution accounts, past profits if any.