AFE 3691 Partnership-admission of a new partner 24-28 February 2020 When firm requires additional capital or managerial help or both for the expansion of its business a new partner may be admitted to supplement its existing resources. A new partner can be admitted into the firm only with the consent of all the existing partners unless otherwise agreed upon. With the admission of a new partner, the partnership firm is reconstituted and a new agreement is entered into to carry on the business of the firm. The procedure to follow with the admission of a partner is summarised as follow: Adjustment to the profit-sharing ratio. Revaluation of the assets of the partnership. Accounting for goodwill Recording the new partner's contribution Redistribution of the reserve Class illustrations: to rimmer Illustration 1 Anna and Valery are partners sharing profits in the ratio of 3:2. They admitted Summer as a new partner for 1/5 share in the future profits of the firm. Calculate mowa plit sharing ratio of Anna, Valery and Summer calculaje has Illustration 2 lanet and Beverly are partners sharing profits in the ratio of 3:2. They admit Smiley as a new partner for 1/5th share in the future profits of the firm which he gets caually from Janet and Beverly, Calculate new profit sharing ratio of Janet, Beverly and Smiley. Illustration 3 Tuli and Hendrik are partners sharing profits in the ratio of 3:2. They admitted Chris as a new partner for 3/10 share which he acquired 2.410 from Tuli and 10 from Hendrik. Calculate the new profit sharing ratio of Tuli, Hendrik and Chris. Illustration 4 Dash and Sylvia are partners in a firm sharing profits in 4:1 ratio. They admitted Paul as a new partner for 14 share in the profits, which he acquired wholly from Dash. Determine the new profit sharing ratio of the partners. 2 3 NI ) X