[CBSE] DK Goel Q. 25 Change in Profit Sharing Ratio Solutions Class 12 (2024-25)
Solution of Question 25 of Change in Profit sharing ratio DK Goel Class 12 CBSE (2024-25)
A and B sharing profits and losses in the ratio of 2 : 3, decide to share future profits and losses equally with effect from 1st April, 2024. An extract of their Balance Sheet as at 31st March, 2024 is as follows:
Liabilities | ₹ | Assets | ₹ |
Workmen Compensation Reserve | 40,0000 |
Show the accounting treatment under the following alternative cases:
Case (i) If there is no other information.
Case (ii) If a claim on account of Workmen’s Compensation is estimated at ₹ 25,000.
Case (iii) If a claim on account of Workmen’s Compensation is estimated at ₹ 40,000
Case (iv) If a claim on account of Workmen’s Compensation is estimated at ₹ 50,000.
Solution:-
![](https://commerceschool.in/wp-content/uploads/2024/07/1-18-1024x259.webp)
In the absence of further information Workmen Compensation Reserve is credited to the partners in their old profit sharing ratio.
![](https://commerceschool.in/wp-content/uploads/2024/07/2-10-1024x283.webp)
In the absence of further information Workmen Compensation Reserve is credited to the partners in their old profit sharing ratio after adjusting the Workmen Compensation Claim.
![](https://commerceschool.in/wp-content/uploads/2024/07/3-8-1024x230.webp)
If the Workmen Compensation Claim is equal to the Workmen Compensation Reserve, nothing would be distributed among the partners.
![](https://commerceschool.in/wp-content/uploads/2024/07/4-5-1024x389.webp)
If Workmen Compensation Claim is more than the Workmen Compensation Reserve, the excess is adjusted through the revaluation account.