If the old partners’ profit-sharing ratio is not given, on what basis is the reserve distributed when a new partner is admitted?

Correct answer: Old partners share equally

A reserve created before the admission of a new partner represents the old partners’ accumulated profit, so it is distributed among them in their old profit-sharing ratio. If that ratio is not given, the usual assumption is that the old partners share equally. The new partner is not entitled to this past accumulation. Exam tip: In the absence of the old ratio, assume equal sharing among the old partners.