Is workmens compensation fund to be distributed among partners in capital ac during admission/retirement/death when making revaluation ,capital a/c and balance sheet? What about workmen compensation reserve? Please answer proffessor :)
Workmen Compensation Reserve and Workmen Compensation Fund are one and the same thing. The treatment at the time of admission/retirement/ death for this reserve is given below:
(A) There no claim for compensation/ no information is given the question:-
Workmen Compensation Reserve A/c ...Dr.
To Partners' Capital A/cs (in their old profit-sharing ratio)
(B) Claim equals WCR:-
Workmen Compensation Reserve A/c ...Dr.
To Provision for Workmen Compensation Claim A/c
(C) Claim is less than WCR:-
Workmen Compensation Reserve A/c ...Dr.
To Provision for Workmen Compensation Claim A/c
To Partners' Capital A/cs (remaining balance distributed in their old profit-sharing ratio)
.
(D) Claim is more than WCR:-
Workmen Compensation Reserve A/c ...Dr.
Revaluation A/c ...Dr. (excess claim is charged to this account)
To Provision for Workmen Compensation Claim A/c
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