Question

At the time of retirement of a partner, profit on revaluation of assets will be credited to the Capital Accounts of _____________.

• A. Retiring Partner
• B. All partners, in the old profit sharing ratio
• C. Remaining partners, in their old profit sharing ratio
• D. Remaining partners in their new profit sharing ratio

Answer 1

The correct option is B All partners, in the old profit sharing ratio

On retirement of a partner, it is required to revalue assets and liabilities just as in the case of admission of a partner. If there is revaluation profit, then such profit should bed distributed amongst the existing partners including the retiring partner at the existing ratio i.e., in old profit sharing ratio and if there is any loss on revaluation that is also to be distributed amongst existing partners in existing ratio.