Why it is necessary to ascertain new profit sharing ratio even for old partners when a new partner is admitted ?

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Solution

When a new partner gets admission in a firm, whatever share he /she acquires, it is always acquired from the old partners in their sacrificing ratio. When old partner sacrifices their share of profit then only a new partner can enter in a firm due to this sacrifice their profit gets reduced and it is always required to calculate the new profit sharing ratio of the partner after the admission of a new partner.

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