Question

P, Q and R are partners in a firm sharing profits in the ratio of 3 : 3 : 2. From 1st April 2024, they decided to share profits equally. On that date following balances appeared in their books:

	₹
Workmen Compensation Reserve	72,000
Investment Fluctuation Reserve	30,000
Investments (At Cost)	6,00,000

Based on the above information you are required to answer the following alternate question:

If a Claim on account of Workmen's Compensation is estimated at ₹ 48,000, then in respect of Workmen Compensation:

Options

• Credit P, Q and R by ₹ 8,000 each

• Debit P, Q and R by ₹ 8,000 each

• Debit R by ₹ 2,000 and Credit P and Q by ₹ 1,000 each

• Credit P by ₹ 9,000, Q by ₹ 9,000 and R by ₹ 6,000

Answer 1

Credit P by ₹ 9,000, Q by ₹ 9,000 and R by ₹ 6,000

Explanation:

Journal Entry for Workmen's Compensation Claim will be
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
	Workmen Compensation Reserve A/c   ...Dr.		72,000
	To Provision for Workmen Compensation Claim A/c			48,000
	To P's Capital A/c			9,000
	To Q's Capital A/c			9,000
	To R's Capital A/c			6,000
	(Being Transfer of excess Workmen Compensation Reserve to partner’s Capital Accounts in their old profit-sharing ratio)