Question

state any two purposes ofcalculating new profit sharing ratio​

Answer 1

Explanation:

The main & first purpose to create a new profit ratio is

1. While admitting & retiring & death of partner, we should create the new ratio to maintain existing or new partner's profits and interest
2. by creating new ratio , any kind of surplus or reserve comes to the firm's or company 's to been shared by all the free consent of every partner

Answer 2

Answer:

Admission & Retirement  of Partner

Explanation:

• Admission of the partner is one of the modes of reconstitution of a partnership firm under which the existing agreement comes to an end and a new one comes into existence.
• A new partnership deed is prepared at the time of admission of a new partner, as the old partnership deed comes to an end.
• The new partner brings his share of goodwill and capital. old partners sacrifice a share of their profits in his favor and thus get a share in future profits of the firm.

The purposes of calculating the new profit sharing ratio​ are as follows:

1. The new profit sharing ratio refers to when a new partner is admitted, he acquires his share of profit from the old partners. This reduces the old partner's share of profit, hence the calculation of the new profit sharing ratio becomes necessary.
2. A partner has the right to retire from the firm after giving due notice in advance, the old partnership comes to an end but the firm continues and a new partnership comes into existence between the remaining partners.

Hence, due to the admission and retirement of a partner in the firm, it becomes necessary to calculate the new profit-sharing ratio.

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