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If Investment Fluctuation Reserve exists and market value of investment is ₹18000 higher than book value which treatment is correct?

Answer and explanation

Correct answer: Full reserve is distributed among old partners and ₹18000 is separate gain

Increase in investment is gain and the reserve also belongs to old partners. Both are adjusted among old partners in old ratio.

Related tags

Investment Fluctuation ReserveInvestment IncreaseGainReservesReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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