Question

Workmen compensation reserve is 30000 in
balance sheet but liabilities claim
toward this,​

Answer 1

Answer:

Explanation:

If there is no claim, distribute this in the profit sharing ratio.

if there is some claim, say claim of 10000, then distribute 20000 (30,000 - 10,000) in the profit sharing ratio and put 10,000 in the liabilities side of the new balance sheet as "provision for workmen compensation claim'

However, if claim is more than the provision itself, say its 40,000, then you put 10000 in revaluation account on the debit side, and transfer 40000 to the liabilities side