X and Y are partners in a firm. On 1st April, 2023, they admitted Z as a partner and new profit sharing ratio is agreed at 3 : 2 : 1. Their Balance Sheet disclosed ‘Workmen Compensation Reserve’ amounting to ₹ 1,00,000 on this date. Show the accounting treatment, if

X and Y are partners in a firm. On 1st April, 2023, they admitted Z as a partner and new profit sharing ratio is agreed at 3 : 2 : 1. Their Balance Sheet disclosed ‘Workmen Compensation Reserve’ amounting to ₹ 1,00,000 on this date. Show the accounting treatment, if

(i) Claim for Workmen Compensation is estimated at ₹ 1,20,000.

(ii) Claim for Workmen Compensation is estimated at ₹ 90,000.

[Ans.

In Case (i) Revaluation loss of ₹ 20,000 debited to X and Y in equal proportion.

In Case (ii) Capital Accounts of X and Y credited by ₹ 5,000 each.]