| Year | 2015-16 | 2016-17 | 2017-18 |
| Profit (Rs.) | 2,20,000 | 2,40,000 | 2,90,000 |
Show adjustment of profits by means of a single adjustment Journal entry.
Solution
The firm of Harry, Porter and Ali, who have been sharing profits in the ratio of 2 : 2 : 1, have existed for same years. Ali wants that he should get equal share in the profits with Harry and Porter and he further wishes that the change in the profit-sharing ratio should come into effect retrospectively were for the three years. Harry and Porter have agreement on this account. The profits for the last three years were: