Question

Q7. P and Q are partners in a firm sharing profits and losses in the ratio of 4:1. decided to take R as a partner for 1/5th share with effect from 1st April 2020. Workmens 'Compensation Reserve was appeared in the balance sheet on that date with Rs. 60000. Show the accounting treatment of workmens' compensation reserve in each of the following alternative cases: Case1: If no information of claim is given Case2: if there is no claim Case:3 If a claim on account of workmens compensation is estimated by Rs. 30000 Case4 If a claim on account of workmens' compensation is estimated by Rs. 75000 (4) *​

Answer 1

Answer:

Case 1 & 2:

W.C.F a/c. Dr ₹60,000

To P's Capital a/c ₹48,000

To Q's Capital a/c. ₹12,000

(Being workmens' compensation fund distributed among old partners on their old rario)

Case 3:

W.C.F a/c. Dr ₹60,000

To W.C.L a/c. ₹30,000

To P's Capital a/c. ₹24,000

To Q's Capital a/c. ₹6,000

(Being there's a Liability of ₹30,000 & remaining workmens' compensation fund distributed among old partners on their old rario)

Case 4:

W.C.F a/c. Dr. ₹60,000

Revaluation a/c Dr ₹15,000

To W.C.L a/c. ₹75,000

(Being there's a Liability of ₹75,000 against a provision of ₹60,000)

W.C.F = Workmens' Compensation Fund.

W.C.L = Workmens' Compensation Liability.

Note - Use full name in exams.