Nitya and Anand are partners in a firm

12 :-  Nitya and Anand are partners in a firm sharing profits and losses equally. With effect from 1st April 2025, they decided to share future profits in the ratio of 3 : 2. On the date of the change in the profit sharing ratio, the Profit & Loss Account had a credit balance of Rs  1,50,000. Pass the necessary Journal entry for the distribution of the balance in the Profit & Loss Account before the change in the profit-sharing ratio.

Solution :-

Nitya’s share in profit = 1,50,000 x 1/2  = Rs 75,000
Anand’s share in profit = 1,50,000 x 1/2 = Rs 75,000