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:

journal entry in the above case-

workmen compensation reserve a/c dr. 60,000

to workmen compensation claim a/c 24,000

to p's capital a/c. 18,000

to q's capital a/c 12,000

to r's capital a/c 6,000

(being workmen compensation reserve distributed among old partners in their old ratio after the treatment of workmen compensation claim)

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