T.S. Grewal Class 12 Chapter 3 Q.27 - Change in Profit-Sharing Ratio Among the Existing Partners

Question 27

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 April, 2025. Land (book value ₹1,00,000) was found undervalued by ₹2,50,000 and stock (book value ₹4,00,000) was found overvalued by ₹3,00,000. Pass the necessary adjusting entry without affecting the existing book values.

Solution

Net revaluation = +₹2,50,000 (land) – ₹3,00,000 (stock) = ₹50,000 (net loss).

Sacrifice / (Gain): Ajeet = 5/10 – 2/10 = 3/10 (Sacrifice); Vijeet = 3/10 – 5/10 = –2/10 (Gain); Sujeet = 2/10 – 3/10 = –1/10 (Gain). For a net loss, the sacrificing partner is debited and the gaining partners are credited.

JOURNAL

Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
2025 Apr 1	Ajeet’s Capital A/c    Dr. (50,000 × 3/10)		15,000
	To Vijeet’s Capital A/c (50,000 × 2/10)			10,000
	To Sujeet’s Capital A/c (50,000 × 1/10)			5,000
	(Adjustment of net revaluation loss in the sacrificing / gaining ratio, without altering book values)