Question : Assertion (A): Gita and Rita are equal partners. They admitted Pooja as a partner and their new profis sharing ratio was 5:3:2 . They revalued the assets and reassessed their liabilities. They did so because new partner should not be at an advantage or disadvantage
Reason (R): Assets and liabilities that exist before admission of Pooja are revalued/reassessed because increase in value of assets and decrease in value of liabilities and vice versa is for the period before admission of Pooja . 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?
Option 1: A) is correct, butt (R) is wrong.
Option 2: Both (A) and (R) are correct.
Option 3: (A) is wrong, but (R) is correct.
Option 4: Both (A) and (R) are wrong.
Correct Answer: Both (A) and (R) are correct.
Solution : Answer = Both (A) and (R) are correct.
The assertion (A) is correct because it highlights the equal treatment of partners during admission. The reason (R) is also correct as it explains the necessity of revaluing assets and reassessing liabilities to ensure fairness in profit sharing and prevent advantages or disadvantages for the new partner.
Hence, the correct option is 2.
