At the time of admission of a partner, undistributed profits appearing in the balance sheet of the old firm is transferred to the capital account of:
- Aold partners in old profit sharing ratio
- Ball the partner in the new profit sharing ratio
- Cold partners in new profit sharing ratio
- Dold partner in the sacrificing ratio
Solution & Step-by-step Explanation
Accumulated profits, reserves, or retained balances belong historically to the period before the new partner's entry. Therefore, they are entirely split among the old partners in their old profit-sharing ratio.