Question

Ajit, Sandeep and Chand sharing profits and losses in the ratio of 4: 3:2, decided to
take Dheeraj as a partner for 1/5th share in the firm with effect from 1st April, 2020. An
extract of their Balance Sheet as at 31st March, 2020 is:
Liabilities
Z ₹
Assets
Workmen Compensation Reserve
90,000
Show the accounting treatment of Workmen Compensation Reserve on the admission
of Dheeraj under following alternative cases:
Case 1. When there is no other information.
Case 2. When a claim on account of workmen compensation is estimated at 45,000.
Case 3. When a claim on account of workmen compensation is estimated at 99,000.​

Answer 1

Answer:

Ajit, Sandeep and Chand sharing profits and losses in the ratio of 4: 3:2, decided to

take Dheeraj as a partner for 1/5th share in the firm with effect from 1st April, 2020. An

extract of their Balance Sheet as at 31st March, 2020 is:

Liabilities

Z ₹

Assets

Workmen Compensation Reserve

90,000

Show the accounting treatment of Workmen Compensation Reserve on the admission

of Dheeraj under following alternative cases:

Case 1. When there is no other information.

Case 2. When a claim on account of workmen compensation is estimated at 45,000.

Case 3. When a claim on account of workmen compensation is estimated at 99,000.

Explanation:

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