Ajeet Vijeet and Sujeet are partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. They decide to share profits and losses in the ratio of 2 : 5 : 3 with effect from 1st Apirl, 2023. Land (having book value of ₹ 1,00,000) was found undervalued by ₹ 2,50,000 and stock (having book value of ₹ 4,00,000) was found overvalued by ₹ 3,00,000. Pass the necessary adjusting entry without affecting the existing book’s value.

Ajeet Vijeet and Sujeet are partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2.

They decide to share profits and losses in the ratio of 2 : 5 : 3 with effect from 1st Apirl, 2023.

Land (having book value of ₹ 1,00,000) was found undervalued by ₹ 2,50,000 and stock (having book value of ₹ 4,00,000) was found overvalued by ₹ 3,00,000.

Pass the necessary adjusting entry without affecting the existing book’s value.

[Ans.: Dr. Ajeet’s Capital A/c by ₹ 15,000; Cr. Vijeet’s Capital A/c by ₹ 10,000 and Sujeet’s Capital A/c by ₹ 5,000.]