Rohit and Shobit are partners in a firm sharing profits in the ratio of 4:1. On April 15, 2025 they admit Nobit as a new partner. On that date, there was a balance of Rs. 80,000 in general reserve and a debit balance of Rs. 40,000 in the profit and loss account of the firm. Regarding adjustment of general reserve:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Rohit's Capital Account will be credited by Rs. 64,000.
On the admission of a new partner, a general reserve is profit earned before he came in. It belongs to the old partners and is credited to their capital accounts in the old ratio.
Rohit = Rs. 80,000 × 4/5 = Rs. 64,000 credit
Shobit = Rs. 80,000 × 1/5 = Rs. 16,000 credit
The debit balance of Rs. 40,000 in the profit and loss account is a separate past loss, debited to the old partners in the same ratio; the question asks only about the general reserve.
Note: NTA picked this question from an NCERT (2026-27) illustration and changed the figures. Do not ignore NCERT while practising numericals.
NCERT (2026-27 edition):
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