Question

List out the adjustments made at the time of retirement of a partner in a partnership firm.

Answer 1

1. Distribution of accumulated profits, reserves and losses
2. Revaluation of assets and liabilities
3. Determination of new profit sharing ratio and gaining ratio
4. Adjustment for goodwill
5. Adjustment for current year’s profit or loss up to the date of retirement.
6. Settlement of the amount due to the retiring partner.