old profit ratio- newprofit ratio=
Answers
Answer:
Case 1: When the share of new or incoming partner is giving without giving the details of the sacrifice made by the old or existing partners
In this case, we will assume that old partners will make the sacrifice in their old profit sharing ratio. Therefore, sacrificing ratio will always be the old profit sharing ratio.
Of course, the new profit sharing ratio will be different but there will be no change in profit sharing ratio of the old partners. (see solved example 1)
Case 2: When new partner purchases his share from the old partners in a particular ratio
In this case, new partners will purchase his share from old partners in a particular ratio. So we will deduct the amount that the new partner will purchase old partners in their particular ratio and then we will calculate the new profit sharing ratio of all the partners.
Case 3: When new partner acquires the share by the surrender of a particular fraction of share by old partners
In this case, we will deduct the share surrender from each old partner to determine his share in the reconstituted firm.
The share that old partners will surrender in favour of the new partner will be added. It will be the share of the new partner.
Case 4: When new partner acquires his entire share from one partner of the firm
In this case, the new partner will acquire his entire share from one partner. We will calculate the sacrificing share of that partner and hat share will be deducted from his ratio and the deducted ratio will be added to the new partner.