The correct answer is Option (2) → (B), (C), (A), (D)
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(B) Ascertainment of new profit sharing ratio and gaining ratio: This is the first step. The new ratio among the continuing partners must be determined to define their future rights and, crucially, to establish the gaining ratio, which is used to distribute the retiring partner's share of goodwill.
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(C) Distribution of accumulated profits and losses: Before the final determination of the retiring partner's due, existing balances like General Reserve, Profit and Loss balances, and existing Goodwill (if any) are distributed among all partners (including the retiring one) in the old ratio. This clears the balance sheet of old claims.
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(A) Ascertainment of share of profit or loss up to the date of retirement/death: The retiring partner is entitled to their share of profit or loss from the last Balance Sheet date up to their date of retirement/death. This calculation finalizes their capital balance for the period they were active in the firm.
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(D) Settlement of the amounts due to retired/deceased partner: This is the final step. After all adjustments (including revaluation, goodwill, reserves, and current period's profit/loss) have been made, the final balance of the retiring partner's capital account is calculated, and the payment or transfer to a loan account is then settled.
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