Calculate the adjustment of capital due to change in profit sharing ratio from 5:3:2 to 2:5:3.

Question

Asked on May 3, 2026Accounting

This accounting problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.

Accepted Answer · 2026-05-03T09:37:04.338Z

Here's the continuation of the solution: Step 3: Calculate the Sacrificing or Gaining Share for each Partner. Sacrificing/Gaining Share = Old Share - New Share For Ajeet: (5)/(10) - (2)/(10) = (3)/(10) (Sacrifice) For Vijeet: (3)/(10) - (5)/(10) = -(2)/(10) (Gain) For Sujeet: (2)/(10) - (3)/(10) = -(1)/(10) (Gain) Step 4: Calculate the Adjustment Amount for each Partner. The net revaluation effect is a loss of ₹50,000. Partners who gain in the new ratio will be debited, and partners who sacrifice will be credited for their share of this loss. Ajeet (Sacrifice): ₹50,000 × (3)/(10) = ₹15,000 (Credit) Vijeet (Gain): ₹50,000 × (2)/(10) = ₹10,000 (Debit) Sujeet (Gain): ₹50,000 × (1)/(10) = ₹5,000 (Debit) Step 5: Pass the Adjusting Entry. The gaining partners' capital accounts are debited, and the sacrificing partner's capital account is credited. | Particulars | Debit (₹) | Credit (₹) | | 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Accepted Answer · 2026-05-03T09:37:04.338Z

Here's the continuation of the solution: Step 3: Calculate the Sacrificing or Gaining Share for each Partner. Sacrificing/Gaining Share = Old Share - New Share For Ajeet: (5)/(10) - (2)/(10) = (3)/(10) (Sacrifice) For Vijeet: (3)/(10) - (5)/(10) = -(2)/(10) (Gain) For Sujeet: (2)/(10) - (3)/(10) = -(1)/(10) (Gain) Step 4: Calculate the Adjustment Amount for each Partner. The net revaluation effect is a loss of ₹50,000. Partners who gain in the new ratio will be debited, and partners who sacrifice will be credited for their share of this loss. Ajeet (Sacrifice): ₹50,000 × (3)/(10) = ₹15,000 (Credit) Vijeet (Gain): ₹50,000 × (2)/(10) = ₹10,000 (Debit) Sujeet (Gain): ₹50,000 × (1)/(10) = ₹5,000 (Debit) Step 5: Pass the Adjusting Entry. The gaining partners' capital accounts are debited, and the sacrificing partner's capital account is credited. | Particulars | Debit (₹) | Credit (₹) | | :-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------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Calculate the adjustment of capital due to change in profit sharing ratio from 5:3:2 to 2:5:3.

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Calculate the adjustment of capital due to change in profit sharing ratio from 5:3:2 to 2:5:3.

Need help with your own homework?

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