At the time of a new partner’s admission, A, B and C are old partners sharing profits in the ratio 2:3:4. The Reserve Fund is ₹108000. What amount will be credited to C’s Capital Account?

Correct answer: ₹48000

The Reserve Fund is distributed among the old partners in their old profit-sharing ratio. C’s share is 4/(2+3+4) = 4/9. Therefore, the amount credited to C’s Capital Account is ₹108000 × 4/9 = ₹48000. Option B represents B’s share, 3/9, not C’s. Exam tip: while distributing an existing reserve at admission, use only the old partners’ ratio and exclude the incoming partner.