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Revaluation of Assets

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Question

In case of admission of a new partner, the profit and loss arising from revaluation account are distributed between the old partners in the ratio.

A

old

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B

gaining

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C

sacrificing

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D

new

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Solution

The correct option is A old
In case of admission of a new partner, the profit and loss arising from revaluation account are distributed between the old partners in the old ratio. Because only old partners have put effort to earn revaluation profit or loss, therefore it's distributed between old partners.

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Similar questions

Q. Consider the following statements :
1. At the time of admission of new partner undistributed profit or losses are distributed to all partners in new ratio.
2. Profit or loss on revaluation of assets and liabilities is transferred to old partner's capital account in old profit sharing ratio.
3. Goods brought in by incoming partner in cash for joining in a partnership firm is taken away by the old partner's in their new profit-sharing ratio.
Which of the above statement/s is/are true ?

Q. Credit balance of Profit & Loss Account shown in the liabilities side is accumulated profit and at the time of admission of a new partner, it is fully distributed among old partners in their old ratio.

Q. State 'True' or 'False'

Profit on revaluation account is distributed between the old partners on admission of a partner.

Why is Reserves and Surplus credited to the old Partners' Capital Accounts in their old profit sharing ratio at the time of admission of a partner?

Q. When goodwill is revalued at the time of admission of a partner, how goodwill is distributed amongst the old partners?

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