Some possible Revision Notes for the chapter "Admission of a Partner" in Class 12 Accountancy are:
1. Admission of a Partner: It refers to the process of inducting a new partner into the existing partnership firm. The admission of a partner leads to the increase in the capital base, sharing of risks, and division of profits.
2. Capital Contribution: The new partner needs to make a capital contribution to the existing partnership firm. The amount of capital contribution is decided through mutual agreement, and the new partner's capital account is opened in the books of accounts.
3. Calculation of New Profit Sharing Ratio: The new partner's share in the profits and losses of the firm needs to be decided. It is calculated based on the capital contribution and the agreement reached between the existing partners and the new partner. The new profit sharing ratio is based on the sacrificing ratio and the gaining ratio.
4. Sacrificing Ratio and Gaining Ratio: The sacrificing ratio is the proportion in which the existing partners are willing to sacrifice their share in the profit to accommodate the new partner. The gaining ratio is the proportion in which the new partner is entitled to a share in the profit. These ratios are calculated based on the agreed-upon capital contribution and the new profit sharing ratio.
5. Accounting Treatment: The new partner's capital contribution is recorded in the books of accounts, and the new partner's capital account is opened. The existing partners' capital accounts are adjusted based on the agreed-upon sacrificing ratio. The new profit sharing ratio is used to calculate the share of profits and losses for each partner.
6. Revaluation of Assets and Liabilities: The partnership firm needs to revalue its assets and liabilities based on their existing market value. The revaluation adjustment is made in the books of accounts, and the value of each asset and liability is adjusted accordingly.
7. Treatment of Goodwill: Goodwill is the value of the reputation, brand, and customer base of the partnership firm. The new partner needs to pay the existing partnership firm for the value of goodwill. The existing partners' capital accounts are adjusted based on the paid value of goodwill.
8. Treatment of Reserves and Accumulated Profits: The existing reserves and accumulated profits of the partnership firm need to be adjusted based on the new profit sharing ratio. The new partner's share in the profits is calculated based on this adjustment.
9. Sharing of Past Losses: The incoming partner might be required to share any past losses of the partnership firm. The treatment of past losses needs to be decided through mutual agreement.
10. Finalization of Deed of Partnership: A new deed of partnership needs to be created to reflect the new profit sharing ratio, capital contribution, and other terms and conditions. The new deed of partnership needs to be signed by all the partners.
More Chapters:-
Revision Notes for Retirement/Death of a Partner
Revision Notes for Dissolution of Partnership Firm
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