#3 "⚡ HSC Accounts Super Revision | Partner Admission, Retirement & Deat Live Lecture!" Siraj Shaikh

*1. Admission of a Partner* When a new partner is admitted to the partnership firm, the existing partners share their profits with the new partner. This involves several key adjustments. *Important Adjustments & Calculations:* *(A) Calculation of New Profit-Sharing Ratio & Sacrificing Ratio* *New Ratio* = Old Ratio – Sacrificed Share *Sacrificing Ratio* = Old Ratio – New Ratio The old partners sacrifice their share in favor of the new partner. #### *Example:* A & B share profits in *3:2* ratio. C is admitted and gets *1/5* share from A & B. New ratio calculation: A’s sacrifice: \( 3/5 \times 1/5 = 3/25 \) B’s sacrifice: \( 2/5 \times 1/5 = 2/25 \) New ratio = A (3/5 - 3/25), B (2/5 - 2/25), C (1/5) --- *(B) Goodwill Adjustment* The new partner must compensate the old partners for the goodwill of the business. Goodwill is distributed in the sacrificing ratio. #### *Formula:* *New Partner’s Share of Goodwill = Total Goodwill × New Partner’s Share* #### *Example:* Firm’s goodwill is *₹50,000**, and C gets **1/5* share. C’s share of goodwill = \( 50,000 \times 1/5 = ₹10,000 \) This amount is distributed among A & B in their sacrificing ratio. *(C) Revaluation of Assets & Liabilities* Any change in asset values is adjusted in **Revaluation Account**. *Profit* on revaluation is credited to old partners in the old ratio. *Loss* on revaluation is debited to old partners in the old ratio. *(D) Adjustment of Capital* New partner contributes capital according to the new profit-sharing ratio. If required, existing partners also adjust their capitals. *2. Retirement of a Partner* When a partner retires, the remaining partners continue the business by adjusting profit-sharing, goodwill, and capital. *Important Adjustments & Calculations:* *(A) Calculation of New Profit-Sharing Ratio & Gaining Ratio* *New Ratio* = Old Ratio of Remaining Partners + Retired Partner’s Share *Gaining Ratio* = New Ratio – Old Ratio The remaining partners gain the outgoing partner’s share. #### *Example:* X, Y, and Z share **5:3:2**. X retires, and Y & Z share in **3:2**. X’s share (5/10) is distributed among Y & Z in their gaining ratio. *(B) Goodwill Adjustment* The retiring partner’s goodwill share is compensated by the remaining partners in the gaining ratio. #### *Formula:* *Retiring Partner’s Share of Goodwill = Total Goodwill × Retiring Partner’s Share* #### *Example:* Goodwill is **₹1,00,000**, X’s share is **5/10**. X’s goodwill = **₹1,00,000 × 5/10 = ₹50,000**. Y & Z pay this in their gaining ratio. *(C) Revaluation of Assets & Liabilities* Assets & liabilities are revalued before the retirement. Profit or loss is adjusted among all partners (including retiring partner) in old ratio. *(D) Settlement of Retiring Partner’s Capital* The retiring partner is paid their **capital balance, goodwill, and share of profit/loss**. It can be settled in **lump sum or installments**. *3. Death of a Partner* When a partner dies, their share is settled with their legal representatives. The calculations are similar to retirement. *Important Adjustments & Calculations:* *(A) Calculation of New Profit-Sharing Ratio & Gaining Ratio* The deceased partner’s share is distributed among the remaining partners in the gaining ratio. *(B) Goodwill Adjustment* The deceased partner’s share of goodwill is given to their legal heirs. *(C) Revaluation of Assets & Liabilities* Assets & liabilities are revalued. The share of profit/loss is credited or debited to the deceased partner’s capital. *(D) Calculation of Deceased Partner’s Share of Profit* Since the partner died in the middle of the year, their *profit up to the date of death* is calculated. #### *Formula:* *Deceased Partner’s Profit = Last Year’s Profit × Deceased Partner’s Share × Months Lived / 12* #### *Example:* Last year’s profit = ₹1,20,000 Partner’s share = *3/10* Partner died in *4th month (April)* Profit = \( 1,20,000 \times 3/10 \times 4/12 = ₹12,000 \) This amount is added to their capital account. *(E) Settlement of Deceased Partner’s Capital* The legal heirs receive **capital balance, goodwill, and share of profit/loss**. It is settled **immediately or in installments**. *Conclusion* *Admission* = New partner joins → Old partners sacrifice share. *Retirement* = Partner leaves → Remaining partners gain share. *Death* = Partner dies → Legal heirs receive settlement. For notes and important questions join our telegram channel : https://t.me/skyeducationofficial Facebook : siraj shaikh Instagram : sam4sir00 Twitter : sirajsam4sir Snapchat : sam4sir Telegram : sam4sir00