The correct treatment for the adjusting entry in this case would be option (A) Shagun's capital account will be debited by ₹3,000 and Anubhav's capital account credited by ₹3,000.
Here's the explanation:
When partners decide to change their profit-sharing ratio, any existing profit or loss balance in the Profit & Loss Account needs to be adjusted among the partners based on the new ratio. In this case, there is a debit balance of ₹30,000 in the Profit & Loss Account.
According to the new profit-sharing ratio of 5:3:2, Shagun's share is 5/10, Anubhav's share is 3/10, and Pulkit's share is 2/10.
To adjust the debit balance, the partners' capital accounts need to be adjusted. Since Shagun's share is 5/10 of the total, she will bear 5/10 of the debit balance, which is (5/10) x ₹30,000 = ₹15,000. This amount will be debited from Shagun's capital account.
Similarly, Anubhav's share is 3/10 of the total, so he will bear 3/10 of the debit balance, which is (3/10) x ₹30,000 = ₹9,000. This amount will be credited to Anubhav's capital account.
Therefore, the correct treatment for the adjusting entry is to debit Shagun's capital account by ₹3,000 and credit Anubhavs capital account by ₹3,000.
