“CUET Accounts Notes by Artham Resources: Chapter 4 – Reconstitution of a Partnership: Change in Profit Sharing Ratio. Explores the accounting principles and procedures involved in adjusting profit sharing ratios among partners.”
Content of Chapter 4 – Reconstitution of a Partnership: Change in Profit Sharing Ratio:
- Introduction to Partnership Reconstitution
- Reasons for Changing Profit Sharing Ratio
- Accounting Treatment for Change in Profit Sharing Ratio: Sacrificing Ratio, Gaining Ratio, and New Profit Sharing Ratio
- Adjustment of Capital Accounts: Calculation of Gain or Loss, Journal Entries, and Ledger Posting
- Treatment of Goodwill: Valuation, Treatment of Existing Goodwill, and Treatment of Additional Goodwill
- Treatment of Accumulated Profits and Losses
- Preparation of Revaluation Account and Partner’s Capital Accounts
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