Rambha and Urvashi were partners in a firm sharing profits and losses in the ratio of 13: 12. From 1st April, 2024, they decided to share future…

Books of Rambha and Urvashi Journal Date Particulars L.F. Dr. Cr. Amount Amount (₹) (₹) $\displaystyle 2024$ Rambha’s Capital A/c Dr. $\displaystyle 1,30,000$ Apr.1 Urvashi’s Capital A/c Dr. $\displaystyle 1,20,000$ To Advertising Suspense A/c $\displaystyle 2,50,000$ (Debit balance of advertising suspense account written off among the partners in their old profit sharing ratio) Apr.1 Urvashi’s Capital A/c Dr. $\displaystyle 20,000$ To Rambha’s Capital A/c $\displaystyle 20,000$ (Adjustment for contingency reserve due to change in profit sharing ratio) Working Notes: Old ratio = $\displaystyle 13$:$\displaystyle 12$ New ratio= $\displaystyle 12$:$\displaystyle 13$ Sacrificed share= Old share- New share Sacrificed share of Rambha= $\displaystyle 13$/$\displaystyle 25$ -$\displaystyle 12$/$\displaystyle 25$= $\displaystyle 1$/$\displaystyle 25$ (sacrifice) Sacrificed share of Urvashi= $\displaystyle 12$/$\displaystyle 25$ -$\displaystyle 13$/$\displaystyle 25$= -$\displaystyle 1$/$\displaystyle 25$ (gain)