26 :- Punit, Ramit and Akshit were partners sharing profits equally. Akshit retired on 1st April 2024 Punit and Ramit decided to continue the business and share profits in the ratio of 3:2. They also decided to give effect to the change in values of assets and liabilities without changing their book values.
The book values and their revised values were as follows:
Pass an adjustment entry.
Solution :-
(a)Calulation of sacrifice/gain of a partner
Old profit sharing ratio of Punit, Ramit and Akshit was 1:1:1
Akshit retired
New profit sharing ratio of Punit and Ramit is 3:2
Punit’s gain = 3/5 – 1/3 = 4/15
Ramit’s gain = 2/5 – 1/3 = 1/15
Therefore, gaining ratio of Punit and Ramit is 4:1
(b) Calculation of adjusting entry of Revaluation profit
Revaluation profit = Rs 135,000
Akshit share = 1,35,000 x 1/3 = Rs 45,000
Punit and Ramit will contribute Akshit share in gaining ratio
Punit will contribute = 45,000 x 4/5 = Rs 36,000
Ramit will contribute = 45,000 x 1/5 = Rs 9,000