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# A, B And C Who Are Presently Sharing Profits and Losses in the Ratio of 5 : 3 : 2 Decide to Share Future Profits and Losses in the Ratio of 2 : 3 : 5 - CBSE (Arts) Class 12 - Accountancy

ConceptRetirement and Death of a Partner - Calculation of New Profit Sharing Ratio

#### Question

A, B and C who are presently sharing profits and losses in the ratio of 5 : 3 : 2 decide to share future profits and losses in the ratio of 2 : 3 : 5. Give the Journal entry to distribute 'Workmen Compensation Reserve' of ₹ 1,20,000 at the time of change in profit-sharing ratio, when:
(i) no information is given; (ii) there is no claim against it.

#### Solution

(i) & (ii)

Journal

 Date Particulars L.F. Debit Amount (₹) Credit Amount (₹) Workmen Compensation Reserve A/c Dr. 1,20,000 To A’s Capital A/c 60,000 To B’s Capital A/c 36,000 To C’s Capital A/c 24,000 (Workmen Compensation Reserve distributed)

Note:

In the both the cases, Workmen Compensation Reserve should be distributed in old ratio i.e., 5:3:2.

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Solution A, B And C Who Are Presently Sharing Profits and Losses in the Ratio of 5 : 3 : 2 Decide to Share Future Profits and Losses in the Ratio of 2 : 3 : 5 Concept: Retirement and Death of a Partner - Calculation of New Profit Sharing Ratio.
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