Match List-I with List-II:List-IList-II(A) Accumulated Profits/Losses(I) New Ratio(B) Share of goodwill at the time of admission of a partner(II) Gaining Ratio(C) Division of profits after admission of a partner(III) Old Ratio(D) Share of goodwill at the time of retirement/death of a partner(IV) Sacrificing RatioChoose the correct answer from the options given below:
- A(A) - (III), (B) - (II), (C) - (I), (D) - (IV)
- B(A) - (III), (B) - (IV), (C) - (I), (D) - (II)
- C(A) - (I), (B) - (IV), (C) - (III), (D) - (II)
- D(A) - (I), (B) - (III), (C) - (II), (D) - (IV)
Solution & Step-by-step Explanation
Standard rules for accounting treatment during partnership reconstitution:Accumulated Profits/Losses: Distributed among the existing/old partners in their Old Profit Sharing Ratio because these profits belong to the period prior to reconstruction.Share of goodwill at the time of admission: Paid by the incoming partner to the existing partners in their Sacrificing Ratio.Division of profits after admission: Distributed among all partners (including the new partner) in the New Profit Sharing Ratio.Share of goodwill at retirement/death: Contributed by the remaining/gaining partners in their Gaining Ratio to compensate the outgoing partner.Therefore, the correct mapping is: (A) - (III), (B) - (IV), (C) - (I), (D) - (II).