Question

Tinku and Munna are partenrs sharing profits in the ratio of 3 : 1. On 1st April, 2026 they admitted Lalit for `1/5`th share in future profits. 

	₹
Workmen Compensation Reserve	1,50,000
Investment Fluctuation Reserve	30,000
Investments (At Cost)	1,00,000
Advertisement Suspense A/c	30,000

Additional Information:

1. Claim on account of Workmen Compensation is estimated at ₹ 1,70,000.
2. Market value of Investments is reduced by 20%.

Give necessary journal entries to record the above transactions.

Answer 1

JOURNAL
Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
2026
April 1	Workmen Compensation Reserve A/c  ....Dr.		1,50,000
	Revaluation A/c   ...Dr.		20,000
	To Provision for Workmen Comp. Claim A/c			1,70,000
	(Adjustment for Workmen Compensation Claim)
”	Tinku’s Capital A/c   ...Dr.		15,000
	Munna’s Capital A/c   ...Dr.		5,000
	To Revaluation A/c			20,000
	(Loss on revaluation transferred to partners’ Capital Accounts in old ratio)
”	Investment Fluctuation Reserve A/c   ...Dr.		30,000
	To Investments			20,000
	To Tinku’s Capital A/c			7,50,000
	To Munna’s Capital A/c			2,500
	(Excess Investment Fluctuation Reserve credited to Partners’ Capital A/cs in old ratio of 3 : 1)
”	Tinku’s Capital A/c   ...Dr.		22,500
	Munna’s Capital A/c   ...Dr.		7,50,000
	To Advertisement Suspense A/c			30,000
	(Advertisement Suspense A/c written off)