Question : P, R and A are partners sharing profit and losses in the ratio of 1:1:1. A retired on 1st April, 2021. P and R decided to continue the business share profit in the ratio of 3: 2. They also decided to give effect to the change In value of assets and liabilities without changing their book value Profit on revaluation is Rs 1,35,000. Adjustment entry will be:
Option 1: Debited revaluation account Rs 1,35,000 and credited old partners capital account by Rs 1,35,000
Option 2: Debited P's capital account by Rs 36,000 and debited R's capital account by Rs 9,000 and credited A's capital account by Rs 45,000
Option 3: Old partner's capital account debited and credited revaluation account by Rs 1,35,000
Option 4: Credited P's capital account by Rs 36,000 and credited R's capital account by Rs 9,000 and debited A's capital account by Rs 45,000
Correct Answer: Debited P's capital account by Rs 36,000 and debited R's capital account by Rs 9,000 and credited A's capital account by Rs 45,000
Solution : Answer = Debited P's capital account by Rs 36,000 and debited R's capital account by Rs 9,000 and credited A's capital account by Rs 45,000
P = $\frac{3}{5}-\frac{1}{3} = \frac{9-5}{15} = \frac{4}{15}\times 1,35,000 = 36,000$
R = $\frac{2}{5}-\frac{1}{3} = \frac{6-5}{15} = \frac{1}{15}\times 1,35,000 = 9,000$
P's Capital A/c Dr 36000
R's Capital A/c Dr 9000
To A's Capital A/c 45000
Hence, the correct option is 2.
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