In a partnership firm, A and B share profits in the old ratio of 3:2. The revaluation of assets results in a profit of ₹25,000. What amount will be credited to B’s Capital Account?

Correct answer: ₹10,000

Revaluation profit is distributed among the old partners in their old profit-sharing ratio. B’s share is \(\frac{2}{3+2}=\frac{2}{5}\). Therefore, the credit to B’s Capital Account is ₹25,000 × \(\frac{2}{5}\) = ₹10,000. ₹15,000 is A’s share, whereas ₹12,500 would arise only if the profit were divided equally. Exam tip: On admission of a partner, distribute revaluation profit or loss among the old partners in their old ratio.