Question

What will be the journal entry , if P,Q and R are partners who are sharing profits and losses in the ratio of 3:2:1, decide to share future profits and losses in the ratio of 4:3:2, with effect from 1st April , 2017. Workmen Compensation Reserve appears in the books at Rs. 60,000. You are informed that the claim on Workmen Compensation Reserve is estimated at Rs. 24,000. PLEASE ANSWER CORRECTLY

Answer 1

Answer:

Workmen compensation a/c. dr 60000

to provision for workmen compensation a/c 24000

to p's capital a/c 18,000

to q's capital a/c. 12000

to r's capital a/c. 6000

Working note

Calculation of partner's share

P'S a/c= 96000×3/6=18000

Q'S a/c =96000×2/6=12000

R'S a/c =96000×1/6=6000

Hope it helps you