Question

Question 9 The whole balance
in investment fluctuation
reserve will not be transferred
to old partners capital account
at the time of admission of a
new partner if book value of
investment is *​

Answer 1

Answer:

When book value of investment is greater than its market value, the whole value of investment fluctuation reserve will not be transferred to old partners capital a/c. Instead, the reserve amount will be used to adjust the decline in the value of investment (book value-market value). If there is excess amount left in the reserve after adjusting the decline in the value of investment, it will be distributed to the old partners in the old ratio

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