Sometimes, at the time of admission, the partners agree that their capitals should also be adjusted so as to be proportionate to their profit sharing ratio (if the capital of the new partner is not given). Arrange the following steps in a correct sequence.
(A) Ascertain combined capital of old partners after all adjustments like interest on capital, salary etc.
(B) Ascertain new capital of all partners
(C) Ascertain necessary amount to cover the shortage and withdraw the excess amount of capital of partners
(D) Ascertain total capital of the firm on the basis of combined capital of old partners
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A), (D), (B), (C)
When the new partner’s capital is not given, the old partners’ combined capital is the base from which the total capital of the new firm is found. Each step needs the figure from the one before it. (Where the new partner’s capital is given, that capital is the base instead.)
(A) Ascertain combined capital of old partners after all adjustments like interest on capital, salary etc. — comes first, because the old partners’ capitals must be final, after goodwill, reserves and revaluation, before they can serve as the base.
(D) Ascertain total capital of the firm on the basis of combined capital of old partners — comes next: the combined capital stands for the old partners’ share of the new firm, so dividing it by that share gives the total capital of the firm.
(B) Ascertain new capital of all partners — follows: once the total is known, each partner’s capital is his share of it in the new profit sharing ratio, the new partner’s included.
(C) Ascertain necessary amount to cover the shortage and withdraw the excess amount of capital of partners — comes last: each old partner’s new capital is compared with his existing capital, and the partner who falls short brings in cash while the one with a surplus withdraws it.
NCERT (2026-27 edition): NCERT (2026-27 edition):
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