Assertion (A): Gurman and Ravi are equal partners. They admitted Param as a partner and their new profit-sharing ratio was 2 : 2 : 1. They revalued the assets and reassessed their liabilities. They did so because a new partner should not be at an advantage or disadvantage.
Assertion (A): Gurman and Ravi are equal partners. They admitted Param as a partner and their new profit-sharing ratio was 2 : 2 : 1. They revalued the assets and reassessed their liabilities. They did so because a new partner should not be at an advantage or disadvantage.
Reason (R): Assets and liabilities that exist before admission of Param are revalued/reassessed because increase in value of assets and decrease in value of liabilities and vice varsa is for the period before admission of Param. If the change in values is accounted, Param will be at an advantage or disadvantage.
In the context of above two statements, which of the following is correct?
(a) Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of Assertion (A).
(b) Both, Assertion (A), and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
(c) Assertion (A) is correct but the Reason (R) is not correct.
(d) Assertion (A) is not correct but the Reason (R) is correct.
Anurag Pathak Changed status to publish June 8, 2023
Ans – b)
Explanation:-
The change in assets and liabilities belongs to the before admission of Param, thus final change is distributed to the old partners in old ratio so that new partner is not advantage or disadvantage.
Anurag Pathak Changed status to publish June 8, 2023
