why for adjusting the capitals of partners are based on the adjusted capitals?
Dear Student
We take adjusted capital because old partners are solely responsible for all income, losses and distributable reserve prior to admission of new partners. These profit and reserves are part of old partner's capital a/c and only old partners have right on these reserve and profit. These profit and reserve are included in closing capital of old partner . (like while calculating profit and loss and Balance Sheet of sole properietor, we add net profit on liability side in Balance Sheet)
So adjusted capital of old partners are closing capital on particular date when new partner admitted.
Capital to be brought by new partner is the amount determined on the basis of total adjusted capital of old partner ( i.e closing capital)
Regards
We take adjusted capital because old partners are solely responsible for all income, losses and distributable reserve prior to admission of new partners. These profit and reserves are part of old partner's capital a/c and only old partners have right on these reserve and profit. These profit and reserve are included in closing capital of old partner . (like while calculating profit and loss and Balance Sheet of sole properietor, we add net profit on liability side in Balance Sheet)
So adjusted capital of old partners are closing capital on particular date when new partner admitted.
Capital to be brought by new partner is the amount determined on the basis of total adjusted capital of old partner ( i.e closing capital)
Regards