X, Y and Z are partners sharing profit and losses in the ratio of 6 : 3 : 1. They admitted W into partnership with effect from 1st April, 2019. New profit-sharing ratio between X, Y, Z and W was agreed to be 3 : 3 : 3 :1. They also decide to record the effect of following revaluations without affecting the book values of the assets and liabilities by passing an adjustment entry:
`{:(,"Book Values RS.","Revised Values RS."),("Plant and Machinery","3,50,000 ","3,40,000"),("Land and Building","5,00,000","5,50,000"),("Trade Creditors","1,00,000","90,000"),("Outstanding Expenses","85,000","1,00,000"),("Pass necessary adjustment entry.",,):}`

Explanation

Gain (Profit) on Revaluation-RS.35,000. On W's admission, Z is gaining 2/10th share and W is also gaining 1/10th share. The gaining ratio between Z and W will be 2 : 1. X is sacrificing 3/10 of his share.
Adjustment Entry: Dr. Z's Capital A/c-RS.7,000 and W,s Capital A/c-RS.-3,500, Cr. X's Capital A/c-RS.10,500.