partnership accounts

The balance will be adjusted in sacrificing and gaining ratios.

A & B sacrificed in the ratio of their old sharing ratio in the absence of any information, i.e. 7:5. C gained 1/5.

A sacrificed 7/12 of 1/5 = 7/60, B = 5/12 of 1/5 = 1/12.

Journal entry:

C's capital a/c Dr. 9,000 (45,000 x 1/5)

To A's capital a/c  5,250 (45,000 x 7/60)

To B's capital a/c 3,750 (45,000 x 1/12)