Question

Arrange the admission procedure in correct sequence: (A) Giving share to the new partner.
(B) Treatment of Goodwill.
(C) Calculating new profit sharing ratio and sacrificing ratio.
(D) Preparation of Revaluation A/c.
(E) Preparing Partner's Capital A/c and Balance Sheet.

• A. (A), (B), (C), (D), (E)
• B. (A), (C), (B), (D), (E)
• C. (A), (D), (C), (B), (E)
• D. (A), (B), (C), (E), (D)

Hint:

Admission of a partner always follows this order: Share → New Ratio → Goodwill → Revaluation → Balance Sheet.

Answer 1

The Correct Option is B

Step 1: When a new partner is admitted: 1. Decide his share in the firm. → (A) first. 2. Adjust old partners' ratios (new and sacrificing ratio). → (C). 3. Adjust for goodwill (compensate sacrificing partners). → (B). 4. Revalue assets and liabilities (Revaluation A/c). → (D). 5. Finally, prepare capital accounts and new Balance Sheet. → (E). Step 2: Sequence becomes (A), (C), (B), (D), (E). Final Answer: \[ \boxed{(A), (C), (B), (D), (E)} \]