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Standard XII

Accountancy

Salary/Commission

X, Y and Z wh...

Question

X, Y and Z who are sharing profits in the ratio of 5 : 3 : 2, decide to share profits in the ratio of 2 : 3 : 5 with effect from 1st April, 2019. Workmen Compensation Reserve appears at ₹ 1,20,000 in the Balance Sheet as at 31st March, 2019 and Workmen Compensation Claim is estimated at ₹ 1,50,000. Pass Journal entries for the accounting treatment of Workmen Compensation Reserve.

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Solution

Journal

Date

Particulars

L.F.

Debit

Amount

(₹)

Credit

Amount

(₹)

2019
April 1

Workmen Compensation Reserve A/c

Dr.

1,20,000

Revaluation A/c

Dr.

30,000

To Provision for Workmen Compensation Claim A/c

1,50,000

(Provision created and shortfall charged to Revaluation A/c)

X’s Capital A/c

Dr.

15,000

Y’s Capital A/c

Dr.

9,000

Z’s Capital A/c

Dr.

6,000

To Revaluation A/c

30,000

(Loss on revaluation transferred to Partners’ Capital A/c)

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Similar questions

Q. X, Y and Z who are presently sharing profits and losses in the ratio of 5 : 3 : 2 decide to share future profits and losses in the ratio of 2 : 3 : 5 . with effect from 1st April, 2018. Workmen Compensation Reserve appears at ₹ 1,20,000 in the Balance Sheet as at 31st March, 2018 and Workmen Compensation Claim is estimated at ₹ 1,50,000. Pass journal entries for the accounting treatment of Workmen Compensation Reserve.

X, Y

and

Z

who are sharing profits and losses in the ratio of

5 : 3 : 2

decide to share future profits and losses in the ratio of

2 : 3 : 5

with effect from

1 s t

April,

2018

. Workmen Compensation Reserve appears at Rs.

1, 20, 000

in the Balance Sheet as on

31 s t

March,

2018

and Workmen Compensation Claim is estimated at Rs.

1, 50, 000

Pass Journal entries for the accounting treatment of Workmen Compensation Reserve.

Q. X, Y and Z who are presently sharing profits and losses in the ratio of 5 : 3 : 2 decide to share future profits and losses in the ratio of 2 : 3 : 5. Give the journal entry to distribute 'Workmen Compensation Reserve' of ₹ 1,20,000 at the time of change in profit-sharing ratio, when there is a claim of ₹ 80,000 against it.

A, B and C are partners sharing profits and losses in the ratio of 2:2:1. They admitted D for $\frac{1}{4} t h$ share with effect from 1st April, 2017. An extract of their Balance Sheet as at 31st March, 2017 is as follows:

$\begin{matrix} Capital and Liabilities & Rs & Assets & Rs Workmen Compensation Reserve & 80, 000 \end{matrix}$

Show the accounting treatment under the following alternative cases:

Case 1. If then is no other information.

Case 2. If a claim for workmen compensation is estimated at Rs 50,000.

Case 3. If a claim for workmen compensation is estimated at Rs 80,000.

Case 4. If a claim for workmen compensation is estimated at Rs 1,00,000.

X, Y

and

Z

who are presently sharing profits and losses in the ratio of

5 : 3 : 2

decide to share future profits and losses in the ratio of

2 : 3 : 5

. Give the Journal entry to distribute 'Workmen Compensation Reserve' of Rs.

1, 20, 000

at the time of change in profit-sharing ratio, when there is a claim of Rs.

80, 000

against it.

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Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2019 April 1
	Workmen Compensation Reserve A/c	Dr.		1,20,000
	Revaluation A/c	Dr.		30,000
	To Provision for Workmen Compensation Claim A/c				1,50,000
	(Provision created and shortfall charged to Revaluation A/c)

	X’s Capital A/c	Dr.		15,000
	Y’s Capital A/c	Dr.		9,000
	Z’s Capital A/c	Dr.		6,000
	To Revaluation A/c				30,000
	(Loss on revaluation transferred to Partners’ Capital A/c)