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Atul, Madan and Mohan sharing profits and Losses in the ratio of 3 : 2 : 1 decide to share profits and losses equally w.e.f 1st April, 2023. Their Balance Sheet shows investment (at cost) at ₹ 3,50,000 and Investment Fluctuation Reserve at ₹ 60,000. What will be the accounting treatment when there is no other information?

a) Investment Fluctuation Reserve ₹ 60,000 will be credited to all partners in their old profit sharing ratio.

b) Investment Fluctuation Reserve ₹ 60,000 will be debited to all partners in their old profit sharing ratio.

c) Investment Fluctuation Reserve ₹ 60,000 will be credited to all partners in their new profit sharing ratio.

d) Investment Fluctuation Reserve will not be distributed.

Anurag Pathak Changed status to publish May 7, 2023