Ajay, Vijay and Sanjay are partners in a firm sharing profits and losses in the ratio of 5 : 4 : 3. Vijay retires. After making all adjustments relating to revolution, goodwill and accumulated profits

Ajay, Vijay and Sanjay are partners in a firm sharing profits and losses in the ratio of 5 : 4 : 3. Vijay retires. After making all adjustments relating to revolution, goodwill and accumulated profits, etc. the capital account of Ajay showed a credit balance of ₹ 2,00,000 and that of Sanjay ₹ 1,00,000. It was decided to adjust the capitals of Ajay and Sanjay in their profit sharing ratio. You are required to calculate the new capital of the partner’s and record necessary entry for surplus/deficit.

[Ans. Ajya will withdraw ₹ 12,500 and Sanjay will bring in ₹ 12,500.]