Accountancy > accounting-for-partnership-firms > Change In Profit Sharing Ratio

Prem, Param and Priya were partners in a firm. Their fixed capitals were: Prem Rs 2,00,000; Param Rs 3,00,000 and Priya Rs 5,00,000. They were sharing profits in the ratio of their capitals (2 : 3 : 5). The new profit sharing ratio was changed to 2 : 1 : 2, effective retrospectively for the last four years. The profits of the last four years were Rs 2,00,000; Rs 3,50,000; Rs 4,75,000 and Rs 5,25,000. Showing your calculations clearly, pass a necessary adjustment entry.