X, Y and Z sharing profits and looses in the ratio of 1 : 2 : 2, decide to share future profits equally with effect from 1st April, 2016. On that date, Profit and Loss Account showed a credit balance of Rs. 1,20,000. Partners do not want to distribute the profit but prefer to record the change in the profit sharing ratio by passing an adjustment entry.
You are required to give the adjusting entry.

Explanation

Old Ratio of X, Y and Z `(1)/(5) : (2)/(5) : (2)/(5)`
New Ratio of X, Y and Z `(1)/(3) : (1)/(3) : (1)/(3)`
Sacrifice or Gain :
`X=(1)/(5)-(1)/(3) = (3-5)/(15)=(2)/(15)` (Gain)
`Y = (2)/(5)-(1)/(3)=(6-5)/(15)=(1)/(15)` (Sacrifice)
`Z = (2)/(5)-(1)/(3) = (6-5)/(15) = (1)/(15)` (Sacrifice)