At the time of admission of a new partner, the revaluation loss is ₹63,000. The old partners’ ratio is 2:5:2 and the new ratio after admission is 3:2:2:2. In what ratio will the revaluation loss be distributed among the old partners?

Correct answer: 2:5:2

A revaluation profit or loss is transferred to the capital accounts of the partners who existed before admission, in their old profit-sharing ratio. Therefore, the loss is distributed in the ratio 2:5:2. Out of ₹63,000, the three old partners will bear ₹14,000, ₹35,000 and ₹14,000 respectively. The new ratio 3:2:2:2 applies to profit sharing after admission, so option B is incorrect. Exam tip: Close the Revaluation Account in the old partners’ old ratio.