BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -The total assets of the partnership will increase upon admission of a new partner by purchase of interest. A partnership dissolution will always lead to a partnership liquidation. If the agreed capital exceed the total contributed capital, the difference may be a positive asset revaluation.

Detailed explanation-2: -A sale of a partnership interest occurs when one partner sells their ownership interest to another person or entity. The partnership is generally not involved in the transaction. However, the buyer and seller will notify the partnership of the transaction.

Detailed explanation-3: -a) When a new partner joins the partnership firms and already existing partners lose or receive fewer profits because of incoming partners, it is called the purchase of interest from another partner. b) When an incoming partner brings in the capital in the form of contribution of the assets to the partner.

Detailed explanation-4: -If a new partner’s investment exceeds his or her capital credit, the excess is a bonus to the old partners. A bonus to the old partners is credited to the old partners’ capital balances in accordance with the old partners’ profit sharing ratios.