Balance Sheet after Admission of Partner

Precautions to be taken

Precautions while preparing Balance sheet of the new firm after Admission of a new partner

  • Capitals of all the partners should be as per new profit sharing ratio.
  • All the Accumulated profits/losses should be shared in old profit sharing ratio or as instructed in the question, so, should not be taken to the new balance sheet, if already distributed.
  • All the assets/liabilities revalued should be shown at revised values in the new balance sheet, including cash/bank balance.

Retirement of Partner