The document discusses the accounting processes related to admitting a new partner or the retirement of an existing partner from a partnership firm. Key points include:
1) When admitting a new partner, the share ratios, additional capital contribution, goodwill payment, and reserves distribution must be determined.
2) Upon a partner's retirement, assets and liabilities are revalued, reserves are distributed, new profit ratios are set, goodwill is valued, and the retiring partner is paid their capital balance and share of profits.
3) Amounts payable to a retiring partner include their capital account, current account, interest on capital, salary, loans plus interest, drawings plus interest, share of any revaluation gains or losses
This Slideshow describes about the Retirement and Death of Partners, Rights of Retiring Partners , Adjustments required at the time of Retirement , Calculating Gaining Ratios, etc..
This Slideshow describes about the Retirement and Death of Partners, Rights of Retiring Partners , Adjustments required at the time of Retirement , Calculating Gaining Ratios, etc..
its my first !
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it is according to class 12 syllabus ! hopefully it will weak students like me ! it contains all fundamentals of partnership firm.
it also usefull in xam times as revision notes!
for more just follow me !
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class 12 / completeguide
its my first !
please #follow so that i will make more for all
it is according to class 12 syllabus ! hopefully it will weak students like me ! it contains all fundamentals of partnership firm.
it also usefull in xam times as revision notes!
for more just follow me !
fb@venuankush
class 12 / completeguide
This ppt is prepared to make familiar with the dividend policy which includes Types of Dividend policy, Procedure for declaring dividend, Why do companies declare dividend
Most small companies start their trading activities by advancing funds via an informal ‘director’s loan’ that in most cases is repaid as soon as the business starts making money.
Process for Declaration & Payment of DividendLegalDelight
“Dividend” means a distribution of any sums to Members by the Company out of profits and wherever permitted out of free reserves available with the Company.
Dividend is basically a return on investment made by an investor in any Company. Generally when business of any company is thriving, Company either resorts to reinvest the profits into the business or distribute a part of their earning among the shareholders as dividend on shares.
Based on the profit or retained earnings, management of the Company may decide for quantum of the dividend to be paid.
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The House of Representatives will not countenance the use of federal funds to indoctrinate students into hateful, antisemitic, anti-American supporters of terrorism. Investigations into campus antisemitism by the Committee on Education and the Workforce and the Committee on Ways and Means have been expanded into a Congress-wide probe across all relevant jurisdictions to address this national crisis. The undersigned Committees will conduct oversight into the use of federal funds at MIT and its learning environment under authorities granted to each Committee.
• The Committee on Education and the Workforce has been investigating your institution since December 7, 2023. The Committee has broad jurisdiction over postsecondary education, including its compliance with Title VI of the Civil Rights Act, campus safety concerns over disruptions to the learning environment, and the awarding of federal student aid under the Higher Education Act.
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2. Admission Of a Partner
INTRODUCTION
A new partner is admitted in a partnership firm due to
the following reasons:
1) Need for additional capital for the expansion of the
business as also the need for bringing fresh energy
into the business.
2) Sometimes when an old partner retires, then it
becomes necessary to admit a new partner in order to
help in the proper management of the firm.
3. Problems
The problem that will-arise on admission of a new
partner will be enumerated as follows:
1) New Ratio: The share of the new comer in
the future profits must also be determined,
as also the new ratio of the old partners.
2) Additional Capital: the new comer also
becomes a part-owner of the assets of the
firm, for which he is expected to-bring some
account towards his capital.
4. 3) Goodwill: The new partner will have to pay some
compensation to the existing partners for the share in
the future profits of the firm that he will receive from
them. The old partner will have to forego part their
share in favor of the new comer. Such payment is
known as Good will.
4) Reserves: Reserve Fund or any accumulated balance
of Profit and loss must be distributed among the old
partner s in their old profit sharing ratio before new
partners is admitted.
5. Revaluation
The true value of some of the assets may be more or less
than the book values on the date of admission. Similarly,
some of the liabilities, May not have been recorded in the
books, e.g. unpaid rent. In such circumstances, if the assets
and liabilities are not brought at their true values in the
books, either the new partner may suffer of the existing
partners may be put to loss. In order that neither party is
benefited or put to loss, it is usual to make necessary
changes in the values of the assets and liabilities before the
new partner is admitted. The changes are brought into the
books through an account called ‘Profit and Loss
adjustment Account’ or ‘Revaluation Account’. The Balance
of this account would show Profit or loss and it must be
transferred to the old partner’s capital accounts in their old
profit-sharing ratio.
6. Distribution Of Profits
When a new partner is admitted, there may be
accumulated profit in the firms. It may be in the name
of Reserve Fund or Profit and loss Account (Cr. Bal).
There may be Accumulated Losses also i.e. Profit and
loss Account (Dr. Bal) shown on the assets side of the
Balance sheet. This profit or loss belongs to the old
partners and must be distributed among the old
partners in the old profit sharing ratio before the new
partner is admitted.
7. Retirement Of a Partner
INTRODUCTION
When a partner retires due to illness old age of any other reason, the
partnership comes to an end. But the form may not be dissolved as the
other partner continues the business. In such a case, the partner ship is
reconstituted legally similarly, when one of the partners dies, the
partnership comes to an end. From the view point of accounts there is
hardly any difference between retirement and death of a partner.
In case of retirement, the partner decides to retire on some convenient
date, generally at the close of the financial year, whereas death occurs
on any date.
In case of the retirement, the total amount due to the retiring partner is
placed to the credit of his loan account, if it is not paid immediately.
And in the case of death, it is transferred to his Executor’s Account.
Generally, the retiring partner is paid his, dues in cash, if however,
accounts are not settled on the date of dissolution and the business is
continued, then the retiring partner has a right to get his proportionate
profit or he is entitled to get interest on these dues at 6% P.a.,
whichever is more beneficial to him.
8. Problems
The following points arise on retirement of a partner:
To revalue the assets and liabilities of the firm.
To distribute general reserve or profit and loss balance
among all partners.
To determine the new profit sharing ratio.
To fix up the value of goodwill of the firm.
To ascertain the profit or loss up to the date of
retirement
To determine the new capital of the firm and make
necessary adjustments
To make payment of the dues of retiring partner.
9. Amount’s Payable to retiring
Partner
The credit balance of his Capital Account. Also the
credit balance of his Current Account, if any
Interest on capital from the date of commencement of
accounting year till the date of his retirement.
Salary payable to the retiring partner, if any, for taking
active part in management of the business.
Partner’s loan, if any and interest on such loan.
10. Contd...
His drawings and interest on drawings, if chargeable.
If the assets and liabilities are to be revaluated at the
time of retirement, then share in any profit or loss
arising out of such revaluation.
His share in profit of the business of the firm till the
date of retirement.
His share in the firm’s goodwill.