Correct Answer: Distributed among all partner’s capital account in old ratio

Solution : Answer = Distributed among all partner’s capital accounts in the old ratio

Reserves and accumulated profits or losses are typically distributed among all partners' capital accounts in their old profit-sharing ratio. This ensures that each partner receives a share of the accumulated profits or losses in proportion to their existing ownership stake in the partnership before any changes in profit-sharing ratios occur.
Hence, the correct option is 2.