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

#### 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 (₹) 2019April 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)
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#### APPEARS IN

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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