Question

$X,Y$ and $Z$ are sharing profit and losses in the ratio of $5:3:2$ . They decide to share future profits and losses in the ratio of $2:3:5$ with effect from $1st$ April, $2018$ . They also decided to record the effect of the following accumulated profits, losses and reserves without affecting their book values by passing a single entry.
Book value (Rs.)

General Reserve	$6,000$
Profit and Loss A/c (Credit)	$240000$
Advertisement Suspense A/c	$12,000$

Answer 1

Z's Capital a/c..............Dr. 70200

To X's Capital a/c 70200

(Being adjustment entry passed)

Working notes:

1. Amount to be distributed = general reserve + P and L a/c - advertisement suspense

= 6000 +240000 -12000 = 234000

2. Calculation of sacrifice and gain

X: 2/10-5/10 = (3/10) sacrifice

Z: 5/10 - 2/10 = 3/10 gain