Due to change in the profit sharing ratio, Shiv’s gain is 1/6, while Om’s sacrifice is 1/6. They decide to record the effect of the following revaluation without affecting the book values of the assets and liabilities, by passing a single adjusting entry:

Book Figure (₹) Realised Figure (₹)
Building 1,00,000 1,50,000
Machinery 1,50,000 1,40,000
Trade Creditors 50,000 45,000
Outstanding Rent 45,000 60,000

The necessary adjusting entry will involve

a) Dr. Shiv and Cr. Om with ₹ 10,000

b) Dr. Om and Cr Shiv with ₹ 10,000

c) Dr. Shiv and Cr. Om with ₹ 5,000

d) Dr. Om and Cr. Shiv with ₹ 9,000

Anurag Pathak Changed status to publish May 5, 2023
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