(a) If at the time of admission of the new partner any Accumulated Profits/Reserves appear in the Balance Sheet, these will be distributed among the old partners in the old ratio by passing the following journal entry:
General reserve Dr.
Reserve Fund Dr.
Profit & Loss A/c Dr.
Investment Fluctuation Fund A/c Dr.
Contingency Reserve A/c Dr.
To Old Partner’s Capital A/c (in old ratio)
(b)For distribution of accumulated losses:
Old Partner’s Capital A/c Dr.
To Profit & Loss A/c