(13) Change in Profit Sharing Ratio
Treatment of workmen compensation Reserve:
ਕਾਮੇ ਮੁਆਵਜ਼ਾ ਸੰਚਯ ਫ਼ੰਡ ਦਾ ਸਮਾਯੋਜਨ:
This
reserve is created of firm’s profits to pay compensation to Employees. At the time of change in profit sharing ratio, it is
treated as follows:
Illustration:
P, Q and R sharing profit of loss in
the ratio 3:2:1 they decided to share future profit in the ratio of 4:3:2
following in the Balance Sheet:
|
Liabilities |
र |
Assets |
र |
|
Workmen
compensation Reserve (WCR) |
60,000 |
|
|
Show the Accounting treatment:
(i)
If there is no information
(ii)
If a claim of र
24, 000
(iii)
If a claim of र
60, 000
(iv)
If a claim of र 75, 000
|
Date |
Particulars |
L.F. |
Doubt
Amount र |
Credit
Amount र |
|
(i) (ii) (iii) (iv)
(i) (ii) |
Workmen
Compensation Reserve A/C
Dr. To
P’s Capital Account To
Q’s Capital Account To
R’s Capital Account (Transfer
of WCR to partner’s cap. A/C in old ratio) Workmen
Compensation Reserve A/C
Dr. To
prove. for W.C. claim A/C To
P’s Capital Account To
Q’s Capital Account To
R’s Capital Account (Transfer
of Excess WCR to partner’s cap. A/C in old ratio) |
|
60,
000 60,000 60,000 60,000 15,000 7,500 5,000 2,500 |
30,
000 20,
000 10,
000 24,000 18,000 12,000 6,000 60,000 75,000 15,000 |
|
Workmen
Compensation Reserve A/C
Dr. To
prove. for W.C. claim A/C (prov.
created & loss charged to revaluation Account) |
||||
|
Workmen
Compensation Reserve A/C
Dr. Revaluation
Account Dr. To
prove. for W.C. claim A/C P’s
Capital Account
Dr. Q’s
Capital Account
Dr. R’s
Capital Account Dr. To
Revaluation Account (Transfer
of loss on revaluation to partner’s cap. A/C in old ratio) |
