Match List I with List II.

Choose the correct answer from the options given below :

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

The correct answer is option 1- A-II, B-III, C-I, D-IV.

* Sacrificing Ratio = Old ratio- New Ratio. It represents the ratio by which an existing partner reduces their profit share to accommodate a new partner. It signifies the 'sacrifice' made by existing partners to bring in a new partner and calculated as: Old Ratio - New Ratio.

* New Ratio =  Old ratio + Gaining Ratio. It represents the final profit-sharing ratio for all partners after retirement or death of a partner.  This new ratio determines how profits will be distributed among all the existing partners. It can be determined through agreement among the partners.

* Gaining Ratio = New Ratio -Old. It represents the ratio by which an existing partner increases their profit share. It can apply to an existing partner who might receive a higher share after retirement or death of a partner.  It is calculated as: New Ratio - Old Ratio.

* Value of goodwill- Average profit × No.of years purchase. The average profits  method of calculating goodwill operates on the assumption that a new business would not generate any profits in its initial years. Consequently, when someone acquires an existing business, they are expected to pay for the anticipated profits for the first few years in the form of goodwill.The steps to calculate the goodwill by average method is-
* Calculate the average profit by dividing the total profits with no of years of profit.
* Calculate goodwill by multiplying the average profits by the specified number of years' purchase.