A and B are partners in a firm sharing profits in the ratio of 3 : 2. They decided to share profits in the ratio of 3 : 4 w.e.f., April 1, 2024. On that date there was a credit balance of ₹ 70,000 in their profit and Loss Account

A and B are partners in a firm sharing profits in the ratio of 3 : 2. They decided to share profits in the ratio of 3 : 4 w.e.f., April 1, 2024. On that date there was a credit balance of ₹ 70,000 in their profit and Loss Account. Pass the necessary journal entry assuming that partners decide to distribute the profits.

[Ans. Credit A’s Capital A/c by ₹ 42,000 and B’s Capital A/c by ₹ 28,000.]