A, B and C share profits in the old ratio of 6:3:1. The total accumulated profit is ₹2,00,000 and the total accumulated loss is ₹80,000. On admission of a new partner, what net amount will be credited to B’s account?

Correct answer: Credit ₹36,000

After adjusting the accumulated loss against the accumulated profit, the net accumulated profit is ₹2,00,000 − ₹80,000 = ₹1,20,000. This amount is distributed among the old partners in their old profit-sharing ratio. B’s share is 3/(6+3+1) = 3/10, so B’s account is credited with ₹1,20,000 × 3/10 = ₹36,000. ₹1,20,000 is the total net amount, not B’s individual share. Exam tip: For distributing reserves or accumulated profits and losses on admission, use the old profit-sharing ratio.