Nishu, Rishu and Kishu were partners in a firm sharing profits and losses in the ratio of $\displaystyle 8$ : $\displaystyle 7$ : 5. They decided to share future profits and losses in the ratio of $\displaystyle 5$ : $\displaystyle 8$ : $\displaystyle 7$ with effect from 1st April, 2024. Their Balance Sheet as at 31st March, $\displaystyle 2024$ showed : (i) General Reserve ₹ $\displaystyle 10,00$,000. (ii) Debit Balance of ₹ $\displaystyle 2,00,000$ in Profit and Loss Account. Goodwill of the firm was valued at ₹ $\displaystyle 20,00,000$ and revaluation of assets and liabilities resulted in a profit of ₹ $\displaystyle 7,00$,000. The partners did not want to distribute the General Reserve and the balance of Profit and Loss Account. They also decided that revalued values of assets and liabilities were not to be recorded in the books. Pass a single adjustment entry to give effect to the above. Show your workings clearly.

JOURNAL Date Particulars L.F. Dr. Cr. `) `) Amount ( Amount ( $\displaystyle 2024$ Rishu’s Capital A/c Dr. $\displaystyle 1,75,000$ April $\displaystyle 1$ Kishu’s Capital A/c Dr. $\displaystyle 3,50,000$ To Nishu’s Capital A/c $\displaystyle 5,25,000$ (adjustment entry due to change in profit sharing ratio) Working Notes Old Ratio = Nishu : Rishu : Kishu = $\displaystyle 8$:$\displaystyle 7$:$\displaystyle 5$ New Ratio = Nishu : Rishu : Kishu = $\displaystyle 5$:$\displaystyle 8$:$\displaystyle 7$ Sacrificing Share = Old Share – New Share Nishu’s Sacrificing Share = $\displaystyle 8$/$\displaystyle 20$ – $\displaystyle 5$/$\displaystyle 20$ = $\displaystyle 3$/$\displaystyle 20$ (sacrifice) Rishu’s Sacrificing Share = $\displaystyle 7$/$\displaystyle 20$ – $\displaystyle 8$/$\displaystyle 20$ = -$\displaystyle 1$/$\displaystyle 20$ (gain) Kishu’s Sacrificing Share = $\displaystyle 5$/$\displaystyle 20$ – $\displaystyle 7$/$\displaystyle 20$ = -$\displaystyle 2$/$\displaystyle 20$ (gain) Particulars ` General Reserve $\displaystyle 10,00,000$ Debit Balance of Profit and Loss Account ($\displaystyle 2,00,000$) Goodwill of the firm $\displaystyle 20,00,000$ Revaluation Profit $\displaystyle 7,00,000$ Total $\displaystyle 35,00,000$ Nishu Sacrifices = $\displaystyle 3$/$\displaystyle 20$ x $\displaystyle 35,00,000$ = `$\displaystyle 5,25,000$, Rishu Gains = $\displaystyle 1$/$\displaystyle 20$ x $\displaystyle 35,00,000$ = `$\displaystyle 1,75,000$ Kishu Gains = $\displaystyle 2$/$\displaystyle 20$ x $\displaystyle 35,00,000$ = `$\displaystyle 3,50$,000.