Arrange the following steps of ‘adjustment of old partners’ capital on the basis of incoming partner’s capital in a correct order. 1. Ascertain the present capital of the old partners. 2. Calculation of total capital of firm on the basis of new partner’s capital. 3. Finding the surplus/deficit capital. 4. Determining the new capital of each partner. Select the correct answer:

The correct answer is: D. 1, 4, 2, 3.

The steps of ‘adjustment of old partners’ capital on the basis of incoming partner’s capital’ are as follows:

1. Ascertain the present capital of the old partners.
2. Calculation of total capital of firm on the basis of new partner’s capital.
3. Finding the surplus/deficit capital.
4. Determining the new capital of each partner.

Here is a brief explanation of each step:

1. Ascertain the present capital of the old partners. This is the first step because it is necessary to know the current capital of the old partners in order to calculate the new capital of each partner.
2. Calculation of total capital of firm on the basis of new partner’s capital. This step involves calculating the total capital of the firm by adding the capital of the old partners to the capital of the new partner.
3. Finding the surplus/deficit capital. This step involves finding the difference between the total capital of the firm and the capital of the old partners. If the total capital of the firm is greater than the capital of the old partners, then there is a surplus. If the total capital of the firm is less than the capital of the old partners, then there is a deficit.
4. Determining the new capital of each partner. This step involves determining the new capital of each partner by adding or subtracting the surplus or deficit to the capital of the old partners.

I hope this explanation is helpful. Let me know if you have any other questions.