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A, B share profits 4:1 and admit C. General reserve is Rs 20,000. How much is credited to A's capital account?

ARs 4,000
BRs 10,000
CRs 20,000
DRs 16,000
Answer & Solution
Correct answer: D. Rs 16,000
The reserve goes to old partners in the old ratio 4:1, so A gets 4/5 of 20,000, which is 16,000.
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