Question 14 Chapter 4 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 14 Chapter 4 of +2-A

Question 14 Chapter 4 of +2-A

14. 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:

  1. no information is given;
  2. there is no claim against it.

 

The solution of Question 14 Chapter 4 of +2-A

 

Note: – in the both case there will be no pending claim against the workmen compensation reserve so the full amount will be distributed among the partners in the old profit sharing ratio.

In the Books of _______________
Date Particulars
L.F. Debit Credit
2019          
April 1 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
  (Being Adjustment for Workmen Compensation Reserve.)      
           

 

Working Note :

Amount to be Credited to A’s Capital = 1,20,000 X 5
10
  = 60,000    

 

Amount to be Credited to B’s Capital = 1,20,000 X 3
10
  = 36,000    

 

Amount to be Credited to C’s Capital = 1,20,000 X 2
10
  = 24,000    

 

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

  • Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
  • Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
  • Chapter No. 3 – Goodwill: Nature and Valuation
  • Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
  • Chapter No. 5 – Admission of a Partner
  • Chapter No. 6 – Retirement/Death of a Partner
  • Chapter No. 7 – Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

  • Chapter No. 1 – Financial Statements of a Company
  • Chapter No. 2 – Financial Statement Analysis 
  • Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
  • Chapter No. 4 – Accounting Ratios
  • Chapter No. 5 – Cash Flow Statement

 

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 1 min - Question 14 Chapter 4 of +2-A - T.S. Grewal 12 Class Part - A Vol. 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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