Question

Rocky and Vicky were partners in a firm sharing profits and losses in the ratio of 4 : 3. On 1st April, 2024 Shivay was admitted as a new partner for `2/7`th share in the profits which he acquired equally from Rocky and Vicky. On the date of Shivay’s admission, the Balance sheet of Rocky and Vicky showed Workmen Compensation Reserve of ₹ 7,00,000.

Pass the necessary journal entries for treatment of workmen compensation reserve on the date of Shivay’s admission in each of the following cases:

1. Claim on account of workmen compensation amounted to ₹ 5,60,000.
2. Claim on account of workmen compensaticn amounted to ₹ 7,00,000.
3. Claim on account of workmen compensation amounted to ₹ 7,20,000.

Answer 1

Journal
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
2024
April-1 (i)	Workmen Compensation Reserve A/c   ...Dr.		7,00,000	-
	To Workmen Compensation Claim A/c		-	5,60,000
	To Rocky’s Capital A/с		-	80,000
	To Vicky’s Capital A/c		-	60,000
	(Being liability for claim created balance transferred in old ratio)
(ii)	Workmen Compensation Reserve A/c    ...Dr.		7,00,000	-
	To Workmen Compensation claim A/c		-	7,00,000
	(Being liability for claim created)
(iii)	Workmen Compensation Reserve A/c    ...Dr.		7,00,000	-
	Revaluation A/c    ...Dr.		20,000	-
	To Workmen Compensation Claim A/c		-	7,20,000
	(Being shortfall of ₹ 20,000 debited to Revaluation A/c, liability for claim created)
(iv)	Rocky’s Capital A/c		11,428	-
	Vicky’s Capital A/c		8,572	-
	To Revaluation A/c		-	20,000
	(Being loss debited to partners in old ratio)