Question

What are the adjustments required at the time of admission of a partner?

Answer 1

The following adjustments are necessary at the time of admission of a partner.

1. Distribution of accumulated profits, reserves and losses
2. Revaluation of assets and liabilities
3. Determination of new profit sharing ratio and sacrificing ratio
4. Adjustment for goodwill
5. Adjustment of capital on the basis of the new profit sharing ratio.