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Can you explain the answer of this question below:
What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:
  • A:
    Amount of compensation = Value’s of firm goodwill x share of loss sacrificed
  • B:
    Amount of compensation = Value’s of firm goodwill x share of profit sacrificed
  • C:
    Amount of compensation = Profit of the year x share of profit gained
  • D:
    Amount of compensation = Value’s of firm goodwill x share of profit gained
The answer is B.
Most Upvoted Answer
Can you explain the answer of this question below:What should be the a...
Whenever there is change in ratio of a partner ,who has sacrificed the Part Of Profit must be compensated by the gaining partners on the basis of Goodwill thus this formula is used
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Community Answer
Can you explain the answer of this question below:What should be the a...
The amount of compensation will be equal to the proportionate amount of goodwill. The valuation of goodwill of a firm, its treatment and adjustment is required at the time of change in existing profit sharing ratio among the partners.
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Can you explain the answer of this question below:What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:A:Amount of compensation = Value’s of firm goodwill x share of loss sacrificedB:Amount of compensation = Value’s of firm goodwill x share of profit sacrificedC:Amount of compensation = Profit of the year x share of profit gainedD:Amount of compensation = Value’s of firm goodwill x share of profit gainedThe answer is B.
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Can you explain the answer of this question below:What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:A:Amount of compensation = Value’s of firm goodwill x share of loss sacrificedB:Amount of compensation = Value’s of firm goodwill x share of profit sacrificedC:Amount of compensation = Profit of the year x share of profit gainedD:Amount of compensation = Value’s of firm goodwill x share of profit gainedThe answer is B. for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Can you explain the answer of this question below:What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:A:Amount of compensation = Value’s of firm goodwill x share of loss sacrificedB:Amount of compensation = Value’s of firm goodwill x share of profit sacrificedC:Amount of compensation = Profit of the year x share of profit gainedD:Amount of compensation = Value’s of firm goodwill x share of profit gainedThe answer is B. covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Can you explain the answer of this question below:What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:A:Amount of compensation = Value’s of firm goodwill x share of loss sacrificedB:Amount of compensation = Value’s of firm goodwill x share of profit sacrificedC:Amount of compensation = Profit of the year x share of profit gainedD:Amount of compensation = Value’s of firm goodwill x share of profit gainedThe answer is B..
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