ADMISSION OF A PARTNER | CALCULATION OF NEW RATIO | CLASS 12 | PART 1

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Admission of a Partner is an important part of the Partnership Agreement. It is a process that involves the acceptance of a new partner into the partnership, and the calculation of the new ratio of the partners’ share of profits and losses.

Admission of a partner is a process that involves the acceptance of a new partner into the partnership, and the calculation of the new ratio of the partners’ share of profits and losses. It is a crucial part of the Partnership Agreement, and it is important to understand the process of admission of a partner and the calculation of the new ratio of the partners’ share of profits and losses.

The admission of a partner is usually done through a written agreement that outlines the terms and conditions of the admission. This agreement should include the name of the new partner, the amount of capital contributed by the new partner, and the new partner’s share of profits and losses. It is important to note that the admission of a partner does not affect the existing partners’ rights and obligations under the Partnership Agreement.

Once the new partner has been admitted, the calculation of the new ratio of the partners’ share of profits and losses must be done. This calculation is based on the capital contributed by each partner, and the amount of profits or losses that each partner has earned. The new ratio is calculated by dividing the capital contributed by each partner by the total capital contributed by all partners.

For example, if Partner A contributes Rs.50,000 and Partner B contributes Rs.30,000, then the new ratio of the partners’ share of profits and losses would be calculated as follows:

Partner A’s share = Rs.50,000/Rs.80,000 = 0.625

Partner B’s share = Rs.30,000/Rs.80,000 = 0.375

This calculation is important to ensure that each partner receives their fair share of profits and losses.

Admission of a partner and the calculation of the new ratio of the partners’ share of profits and losses is an important part of the Partnership Agreement. It is important to understand the process of admission of a partner and the calculation of the new ratio of the partners’ share of profits and losses in order to ensure that each partner receives their fair share of profits and losses.