Match List – I with List – II.

Choose the correct answer from the options given below :

(A)-(III), (B)-(IV), (C)-(I), (D)-(II)

The correct answer is option 4- (A)-(III), (B)-(IV), (C)-(I), (D)-(II).

(A) old ratio- (III) Sharing revaluation profits.
At the time of admission, retirement or death of a partner there may be some assets which may not have been shown at their current values. Similarly, there may be certain liabilities which have been shown at a value different from the obligation to be met by the firm. Not only that, there may be some unrecorded assets and liabilities which need to be brought into books. A Revaluation Account is prepared in order to ascertain net gain (loss) on revaluation of assets and/or liabilities and bringing unrecorded items into firm’s books and the same is transferred to the capital account of all partners including retiring/deceased partners in their old profit sharing ratio.

(B) new ratio- (IV)  Sharing future profits. 
New profit sharing ratio is the ratio in which the remaining partners will share future profits after the retirement or death of any partner. The new share of each of the remaining partner will consist of his own share in the firm plus the share acquired from the retiring /deceased partner. 

(C) sacrificing ratio- (I) Distribution of premium for goodwill.
The ratio in which the old partners agree to sacrifice their share of profit in favour of the incoming partner is called sacrificing ratio. The new partner is required to compensate the old partner’s for their loss of share in the super profits of the firm for which he brings in an additional amount as premium for goodwill. This amount is shared by the existing partners in the ratio in which they forgo their shares in favour of the new partner which is called sacrificing ratio.

(D) gaining ratio- (II) for adjustment of goodwill in death of partner.
The ratio in which the continuing partners have acquired the share from the retiring/deceased partner is called the gaining ratio. Normally, the continuing partners acquire the share of retiring/deceased partner in their old profit sharing ratio. We must determine the gaining ratio to compute goodwill adjustment.