Question 16:
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:
(i) no information is given; (ii) there is no claim against it.
Answer:
(i) & (ii)
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ( `) |
Credit ( `) |
|
|
|
|
|
|
|
|
|
|
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 Workmen
Compensation Reserve distributed) |
|
|
|
|
Note:
In the both the cases, Workmen Compensation Reserve should be distributed in old ratio i.e., 5:3:2.
Question 17:
X, Y and
Z 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 there is a claim of ` 80,000 against it.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ( `) |
Credit ( `) |
|
|
|
Workmen
Compensation Reserve A/c |
Dr. |
|
1,20,000 |
|
|
|
To X’s
Capital A/c |
|
|
|
20,000 |
|
|
To Y’s
Capital A/c |
|
|
|
12,000 |
|
|
To Z’s
Capital A/c |
|
|
|
8,000 |
|
|
To Workmen Compensation Claim A/c |
|
|
|
80,000 |
|
|
(Being
Adjustment of balance in Workmen Compensation Reserve A/c in old ratio) |
|
|
|
|
Working Notes:
WN1 Calculation
of Share of Workmen Compensation Reserve
X's share=40,000×5/10=20,000
Y's share=40,000×3/10=12,000
Z's share=40,000×2/10=8,000
Question 18:
Ashok, Bhim and Chetan 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, 2023.
Workmen Compensation Reserve appears at ` 1,20,000 in the Balance Sheet as at 31st March, 2023 and
Workmen Compensation Claim is estimated at ` 1,50,000. Pass Journal entries for the accounting treatment
of Workmen Compensation Reserve.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ( `) |
Credit ( `) |
|
|
2023 |
|
|
|
|
|
|
|
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 |
|
|
(Being Provision
created and shortfall charged to Revaluation A/c) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Ashok’s Capital
A/c |
Dr. |
|
15,000 |
|
|
|
Bhim’s Capital
A/c |
Dr. |
|
9,000 |
|
|
|
Chetan’s Capital
A/c |
Dr. |
|
6,000 |
|
|
|
To Revaluation A/c |
|
|
|
30,000 |
|
|
(Being Loss on
revaluation transferred to Partners’ Capital A/c) |
|
|
|
|
Question 19:
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 'Investments Fluctuation Reserve' of ` 20,000 at the time of change
in profit-sharing ratio, when investment (market value ` 95,000) appears in the books
at ` 1,00,000.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ( `) |
Credit ( `) |
|
|
|
Investment
Fluctuation Reserve A/c |
Dr. |
|
5,000 |
|
|
|
To
Investments A/c |
|
|
5,000 |
|
|
|
(Being
Adjustment for decrease in the value of investments) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
Fluctuation Reserve A/c |
Dr. |
|
15,000 |
|
|
|
To A’s
Capital A/c |
|
|
|
7,500 |
|
|
To B’s
Capital A/c |
|
|
|
4,500 |
|
|
To C’s
Capital A/c |
|
|
|
3,000 |
|
|
(Being
Adjustment of balance in Investment Fluctuation Reserve A/c in old ratio) |
|
|
|
|
Working Notes:
WN1 Calculation of Share of Investment
Fluctuation Reserve
A's share=15,000×5/10=7,500
B's share=15,000×3/10=4,500
C's share=15,000×2/10=3,000
Question 20:
Nitin, Tarun and Amar are partners sharing profits equally and decide to share profits in the ratio of 2 : 2 : 1 w.e.f. 1st April, 2023. The extract of their Balance Sheet as at 31st March, 2023 is as follows:
|
Liabilities |
` |
Assets |
` |
|
Investments
Fluctuation Reserve |
60,000 |
Investments
(At Cost) |
4,00,000 |
Pass the Journal entries in each of the following situations:
(i) When its Market Value is not given;
(ii) When its Market Value is `
4,00,000;
(iii) When its Market Value is `
4,24,000;
(iv) When its Market Value is `
3,70,000;
(v) When its Market Value is `
3,10,000.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ( `) |
Credit ( `) |
|
|
2023 |
|
|
|
|
|
|
April 1 |
Investment
Fluctuation Reserve A/c |
Dr. |
|
60,000 |
|
|
|
To
Nitin’s Capital A/c |
|
|
|
20,000 |
|
|
To
Tarun’s Capital A/c |
|
|
|
20,000 |
|
|
To
Amar’s Capital A/c |
|
|
|
20,000 |
|
|
(Being
Investment Fluctuation Reserve distributed) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
Fluctuation Reserve A/c |
Dr. |
|
60,000 |
|
|
|
To
Nitin’s Capital A/c |
|
|
|
20,000 |
|
|
To
Tarun’s Capital A/c |
|
|
|
20,000 |
|
|
To
Amar’s Capital A/c |
|
|
|
20,000 |
|
|
(Being
Investment Fluctuation Reserve distributed) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
Fluctuation Reserve A/c |
Dr. |
|
60,000 |
|
|
|
To
Nitin’s Capital A/c |
|
|
|
20,000 |
|
|
To
Tarun’s Capital A/c |
|
|
|
20,000 |
|
|
To
Amar’s Capital A/c |
|
|
|
20,000 |
|
|
(Being
Investment Fluctuation Reserve distributed) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments A/c |
Dr. |
|
24,000 |
|
|
|
To Revaluation A/c |
|
|
|
24,000 |
|
|
(Being Investments
revalued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
24,000 |
|
|
|
To
Nitin’s Capital A/c |
|
|
|
8,000 |
|
|
To
Tarun’s Capital A/c |
|
|
|
8,000 |
|
|
To
Amar’s Capital A/c |
|
|
|
8,000 |
|
|
(Being
Revaluation profit transferred to Partners’ Capital A/c) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
Fluctuation Reserve A/c |
Dr. |
|
60,000 |
|
|
|
To
Investment A/c |
|
|
|
30,000 |
|
|
To
Nitin’s Capital A/c |
|
|
|
10,000 |
|
|
To
Tarun’s Capital A/c |
|
|
|
10,000 |
|
|
To
Amar’s Capital A/c |
|
|
|
10,000 |
|
|
(Being
Investment Fluctuation Reserve distributed) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
Fluctuation Reserve A/c |
Dr. |
|
60,000 |
|
|
|
Revaluation A/c |
Dr. |
|
30,000 |
|
|
|
To Investment A/c |
|
|
|
90,000 |
|
|
(Decrease in
investments set off against IFR and balance debited to Revaluation A/c) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nitin’s Capital
A/c |
Dr. |
|
10,000 |
|
|
|
Tarun’s Capital
A/c |
Dr. |
|
10,000 |
|
|
|
Amar’s Capital
A/c |
Dr. |
|
10,000 |
|
|
|
To Revaluation A/c |
|
|
|
30,000 |
|
|
(Being Loss on
revaluation transferred to Partners’ Capital A/c) |
|
|
|
|
Ts Grewal Solution 2023-2024
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Class 12 / Volume – I