Ch 5 · Partnership Accounts

🧮 Formula sheet

1. 1.Sacrificing Ratio = Old Ratio − New Ratio
2. 2.Gaining Ratio = New Ratio − Old Ratio
3. 3.Goodwill (Avg Profit Method) = Average Profit × Number of years' purchase
4. 4.Goodwill (Super Profit) = Super Profit × No. of years
5. 5.Super Profit = Average Profit − Normal Profit (Capital × Normal Rate)