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X, Y And Z Who Are Sharing Profits in the Ratio of 5 : 3 : 2, Decide to Share Profits in the Ratio of 2 : 3 : 5 with Effect from 1st April, 2019. - CBSE (Arts) Class 12 - Accountancy

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Question

X, Y and Z who are sharing profits in the ratio of 5 : 3 : 2, decide to share profits in the ratio of 2 : 3 : 5 with effect from 1st April, 2019. Workmen Compensation Reserve appears at ₹ 1,20,000 in the Balance Sheet as at 31st March, 2019 and Workmen Compensation Claim is estimated at ₹ 1,50,000. Pass Journal entries for the accounting treatment of Workmen Compensation Reserve. 

Solution

Journal

Date

Particulars

L.F.

Debit

Amount

(₹)

Credit

Amount

(₹)

2019
April 1

 

 

 

 

 

 

Workmen Compensation Reserve A/c

Dr.

 

1,20,000

 

 

Revaluation A/c

Dr.

 

30,000

 

 

    To Provision for Workmen Compensation Claim A/c

 

 

 

1,50,000

 

(Provision created and shortfall charged to Revaluation A/c)

 

 

 

 

 

X’s Capital A/c

Dr.

 

15,000

 

 

Y’s Capital A/c

Dr.

 

9,000

 

 

Z’s Capital A/c

Dr.

 

6,000

 

 

    To Revaluation A/c

 

 

 

30,000

 

(Loss on revaluation transferred to Partners’ Capital A/c)

 

 

   
  Is there an error in this question or solution?

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Solution X, Y And Z Who Are Sharing Profits in the Ratio of 5 : 3 : 2, Decide to Share Profits in the Ratio of 2 : 3 : 5 with Effect from 1st April, 2019. Concept: Retirement and Death of a Partner - Calculation of New Profit Sharing Ratio.
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