Question

In what proportion is general reserve distributed amongst the old partners? (Answer in one sentence)

Answer 1

Elo!!

-- HERE IS THE ANSWER --

- Because general reserve is created from undistributed profits of the OLD partners over which they have exclusive rights.

Answer 2

The general reserve is distributed among the partners in their old ratio.

• General reserves are nothing more than the profits the company had earned in previous years. Profits are shared to associates. Similarly, reserves are shared between partners as well.
• Under their old profit-sharing ratio the sum of general reserve is to be shared among the old partners. This reserve belongs to the old partners as it was formed from the earnings of the previous years; thus, no share of the general fund is earned by the new partners.