Question : X y and Z are partners sharing profit in the ratio of 5:3:2. They decided to share future profit in the ratio of 2:3:5. Workmen compensation reserve appearing in the balance sheet on that date when no information as to workmen's compensation claim is given will be
Option 1: Distributed among partners in their capital ratio
Option 2: Distributed among partner in their new profit sharing ratio
Option 3: Distributed among partner in their old profit sharing ratio
Option 4: Carried forward to new balance sheet
Correct Answer: Distributed among partner in their old profit sharing ratio
Solution : Answer = Distributed among partner in their old profit-sharing ratio
If no information regarding workmen's compensation claims is provided, the workmen's compensation reserve appearing in the balance sheet will be distributed among the partners based on their old profit-sharing ratio. This ensures consistency with the existing allocation method until further information or adjustments are made. Hence, the correct option is 3.
Question : P, Q and R are partners sharing profits in the ratio of 5: 3: 2. They decided to share future profits in the ratio of 2: 3: 5. What will be the accounting treatment of Workmen Compensation Reserve appearing in the Balance Sheet on that date when no other information is
Question : At the time of reconstruction of a partnership due to admission of a new partner, the balance of the Workmen Compensation Reserve will be transferred to:
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Question : In the event of change in profit-sharing ratio, profit and loss (credit balance) existing in the Balance Sheet is transferred to Capital Accounts of partners in their
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