Question

Nandini, Shweta and Hiren were partners in a firm sharing profits and losses in the ratio of $9:7:4$. On 1$^{\text{st}}$ April, 2025, Shweta retired. On the date of Shweta’s retirement, there existed a balance of ₹ 1,00,000 in Workmen’s Compensation Fund. Pass necessary journal entries for treatment of Workmen’s Compensation Fund on Shweta’s retirement in each of the following cases:

• [(i)] Claim on account of Workmen’s Compensation was estimated at ₹ 1,20,000.
• [(ii)] Claim on account of Workmen’s Compensation was estimated at ₹ 80,000.
• [(iii)] Claim on account of Workmen’s Compensation was estimated at ₹ 1,00,000.

Hint:

Workmen’s Compensation Fund:

• Claim>Fund → deficiency = loss (old ratio)
• Claim& Lt;Fund → surplus = gain (old ratio)
• Claim = Fund → no adjustment

Answer 1