Question

Nandini, Shweta and Hiren were partners in a firm sharing profits and losses in the ratio of 9 : 7 : 4. On 1^st April, 2025, Shweta retired. On the date of Shweta’s retirement, there existed a balance of ₹ 1,00,000 in Workmen’s Compensation Fund.

Pass necessary journal entries for treatment of Workmen’s Compensation Fund on Shweta’s retirement in each of the following cases:

1. Claim on account of Workmen’s Compensation was estimated at ₹ 1,20,000.
2. Claim on account of Workmen’s Compensation was estimated at ₹ 80,000.
3. Claim on account of Workmen’s Compensation was estimated at ₹ 1,00,000.

Answer 1

Profit-sharing ratio of partners:

Nandini = 9, Shweta = 7, Hiren = 4

Total = 20

Workmen’s Compensation Fund = ₹ 1,00,000

i. Claim estimated at ₹ 1,20,000 (Claim > Fund)

Date	Particulars	L.F.	Debit (₹)	Credit (₹)
2025
April 1	Workmen’s Compensation Fund A/c   ...Dr.		1,00,000
	Revaluation A/c   ...Dr.		20,000
	To Provision for Workmen’s Compensation Claim A/c			1,20,000
	(Being claimed, estimated, and deficiency debited to revaluation)
April 1	Nandini’s Capital A/c `(20,000 xx 9/20)`   ...Dr.		9,000
	Shweta’s Capital A/c `(20,000 xx 7/20)`   ...Dr.		7,000
	Hiren’s Capital A/c `(20,000 xx 4/20)`   ...Dr.		4,000
	To Revaluation A/c			20,000
	(Being revaluation loss distributed among old partners)

ii. Claim estimated at ₹ 80,000 (Claim < Fund)

Date	Particulars	L.F.	Debit (₹)	Credit (₹)
2025
April 1	Workmen’s Compensation Fund A/c   ...Dr.		1,00,000
	To Provision for Workmen’s Compensation Claim A/c			80,000
	To Nandini’s Capital A/c `(20,000 xx 9/20)`			9,000
	To Shweta’s Capital A/c `(20,000 xx 7/20)`			7,000
	To Hiren’s Capital A/c `(20,000 xx 4/20)`			4,000
	(Being surplus fund distributed among partners in old ratio)

iii. Claim estimated at ₹ 1,00,000 (Claim = Fund)

Date	Particulars	L.F.	Debit (₹)	Credit (₹)
2025
April 1	Workmen’s Compensation Fund A/c   ...Dr.		1,00,000
	To Provision for Workmen’s Compensation Claim A/c			1,00,000
	(Being entire fund transferred to provision for claim)