Lata, Shivangi and Vineeta are partners in a firm sharing profits in the ratio of 5 : 3 : 2. Shivangi retires. After making all adjustments relating to revaluation, goodwill and accumulated profit etc., the capital accounts of Lata and Vineeta showed a credit balance of Rs. 3,20,000 and Rs. 2,40,000 respectively. It was decided to adjust the capitals of Lata and Vineeta in their new profit sharing ratio. What would be the journal entries for bringing in or withdrawal of the necessary amounts involved?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Bank A/c Dr. 80,000, To Lata's Capital A/c 80,000; and Vineeta's Capital A/c Dr. 80,000, To Bank A/c 80,000
When the remaining partners agree to keep their capitals in their new profit sharing ratio, the total of their capitals is divided in that ratio. A partner below the required figure brings in cash; a partner above it withdraws the surplus.
New ratio of Lata and Vineeta (Shivangi's share taken in the old ratio) = 5 : 2
Total capital = 3,20,000 + 2,40,000 = Rs. 5,60,000
Lata's required capital = 5,60,000 × 5/7 = Rs. 4,00,000
Lata brings in 4,00,000 − 3,20,000 = Rs. 80,000
Vineeta's required capital = 5,60,000 × 2/7 = Rs. 1,60,000
Vineeta withdraws 2,40,000 − 1,60,000 = Rs. 80,000
The entries:
Bank A/c Dr. 80,000
To Lata's Capital A/c 80,000Vineeta's Capital A/c Dr. 80,000
To Bank A/c 80,000
Cash brought in is debited to Bank and credited to Lata's capital, which goes up; cash withdrawn is debited to Vineeta's capital, which goes down, and credited to Bank.
Note: NTA picked this question from an NCERT (2026-27) illustration and changed the figures. Do not ignore NCERT while practising numericals.
NCERT (2026-27 edition):
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