Match List-I with List-II.

Choose the correct answer from the options given below :

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

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

* Profits of firm after admission of partner- New Ratio.

When a new partner joins a firm, the existing partners might need to adjust their profit-sharing ratio to accommodate the new member. This new ratio is determined through a partnership agreement and reflects the contribution each partner brings to the business. The existing and new partner receives a share of the profits based on this new ratio.

* Goodwill brought in by new partner- Sacrificing Ratio.

If a new partner brings in goodwill, It is transferred in sacrificing ratio. The sacrificing ratio reflects the proportion by which existing partners reduce their profit share for the new partner and now the new partner will compensate the existing partners through goodwill.

* Profit on revaluation- Old Ratio.

When assets are revalued upwards, this profit is distributed among the existing partners according to their old profit-sharing ratio. This is because the revaluation reflects the pre-existing value of the firm, which the existing partners built together. The new partner doesn't share in this revaluation profit as they weren't part of the firm at the time.

* Retiring Partner's Share of Goodwill-Gaining Ratio.

Goodwill can also exist when a partner leaves the firm. Their share of the goodwill represents the value they contributed to the firm's reputation and customer base. When a partner retires, they may be compensated for their share of the goodwill. The gaining ratio reflects the proportion by which the remaining partners increase their profit share and remaining partners will compensate the retiring partner for their goodwill contribution in this ratio.