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X, Y and Z are partners sharing profits and losses in the ratio 5:3:2 decide to share the future profits in the ratio 2:3:5. What will be the treatment for workmen compensation fund appearing in the balance sheet on the date if no information is available for the same?
- a)Distributed to the partners in old profit sharing ratio
- b)Distributed to the partners in new profit sharing ratio
- c)Distributed to the partners in capital ratio
- d)Carried forward to new balance sheet without any adjustment
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
X, Y and Z are partners sharing profits and losses in the ratio 5:3:2 ...
Treatment for workmen compensation fund in the given scenario:
Distribution to the partners in old profit sharing ratio.
Explanation:
When there is no information available regarding the treatment of workmen compensation fund, it is assumed that the fund is a liability and needs to be settled. As per the partnership agreement, the profits and losses are shared in the ratio of 5:3:2. Therefore, the workmen compensation fund liability should also be distributed among the partners in the same ratio. Hence, the correct option is A, i.e., distributed to the partners in old profit sharing ratio.
This means that the workmen compensation fund liability will be distributed among the partners in the ratio of 5:3:2 as per the old profit sharing ratio and will be adjusted against their respective capital accounts. The remaining balance, if any, will be transferred to the current account of the partners.
It is important to note that the distribution of the workmen compensation fund liability should be done before the distribution of profits in the new ratio of 2:3:5. This is because the workmen compensation fund liability is a prior charge on profits and needs to be settled before any profits are distributed among the partners.
In conclusion, the workmen compensation fund liability will be distributed to the partners in the old profit sharing ratio and will be adjusted against their respective capital accounts.
Distribution to the partners in old profit sharing ratio.
Explanation:
When there is no information available regarding the treatment of workmen compensation fund, it is assumed that the fund is a liability and needs to be settled. As per the partnership agreement, the profits and losses are shared in the ratio of 5:3:2. Therefore, the workmen compensation fund liability should also be distributed among the partners in the same ratio. Hence, the correct option is A, i.e., distributed to the partners in old profit sharing ratio.
This means that the workmen compensation fund liability will be distributed among the partners in the ratio of 5:3:2 as per the old profit sharing ratio and will be adjusted against their respective capital accounts. The remaining balance, if any, will be transferred to the current account of the partners.
It is important to note that the distribution of the workmen compensation fund liability should be done before the distribution of profits in the new ratio of 2:3:5. This is because the workmen compensation fund liability is a prior charge on profits and needs to be settled before any profits are distributed among the partners.
In conclusion, the workmen compensation fund liability will be distributed to the partners in the old profit sharing ratio and will be adjusted against their respective capital accounts.
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Community Answer
X, Y and Z are partners sharing profits and losses in the ratio 5:3:2 ...
Because at the time of reconstitution of partnership, all reserves are distributed among all partners at old ratio. so as to get fair estimation of assets/liabilities.
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X, Y and Z are partners sharing profits and losses in the ratio 5:3:2 decide to share the future profits in the ratio 2:3:5. What will be the treatment for workmen compensation fund appearing in the balance sheet on the date if no information is available for the same?a)Distributed to the partners in old profit sharing ratiob)Distributed to the partners in new profit sharing ratioc)Distributed to the partners in capital ratiod)Carried forward to new balance sheet without any adjustmentCorrect answer is option 'A'. Can you explain this answer?
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X, Y and Z are partners sharing profits and losses in the ratio 5:3:2 decide to share the future profits in the ratio 2:3:5. What will be the treatment for workmen compensation fund appearing in the balance sheet on the date if no information is available for the same?a)Distributed to the partners in old profit sharing ratiob)Distributed to the partners in new profit sharing ratioc)Distributed to the partners in capital ratiod)Carried forward to new balance sheet without any adjustmentCorrect answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about X, Y and Z are partners sharing profits and losses in the ratio 5:3:2 decide to share the future profits in the ratio 2:3:5. What will be the treatment for workmen compensation fund appearing in the balance sheet on the date if no information is available for the same?a)Distributed to the partners in old profit sharing ratiob)Distributed to the partners in new profit sharing ratioc)Distributed to the partners in capital ratiod)Carried forward to new balance sheet without any adjustmentCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X, Y and Z are partners sharing profits and losses in the ratio 5:3:2 decide to share the future profits in the ratio 2:3:5. What will be the treatment for workmen compensation fund appearing in the balance sheet on the date if no information is available for the same?a)Distributed to the partners in old profit sharing ratiob)Distributed to the partners in new profit sharing ratioc)Distributed to the partners in capital ratiod)Carried forward to new balance sheet without any adjustmentCorrect answer is option 'A'. Can you explain this answer?.
X, Y and Z are partners sharing profits and losses in the ratio 5:3:2 decide to share the future profits in the ratio 2:3:5. What will be the treatment for workmen compensation fund appearing in the balance sheet on the date if no information is available for the same?a)Distributed to the partners in old profit sharing ratiob)Distributed to the partners in new profit sharing ratioc)Distributed to the partners in capital ratiod)Carried forward to new balance sheet without any adjustmentCorrect answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about X, Y and Z are partners sharing profits and losses in the ratio 5:3:2 decide to share the future profits in the ratio 2:3:5. What will be the treatment for workmen compensation fund appearing in the balance sheet on the date if no information is available for the same?a)Distributed to the partners in old profit sharing ratiob)Distributed to the partners in new profit sharing ratioc)Distributed to the partners in capital ratiod)Carried forward to new balance sheet without any adjustmentCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X, Y and Z are partners sharing profits and losses in the ratio 5:3:2 decide to share the future profits in the ratio 2:3:5. What will be the treatment for workmen compensation fund appearing in the balance sheet on the date if no information is available for the same?a)Distributed to the partners in old profit sharing ratiob)Distributed to the partners in new profit sharing ratioc)Distributed to the partners in capital ratiod)Carried forward to new balance sheet without any adjustmentCorrect answer is option 'A'. Can you explain this answer?.
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ample number of questions to practice X, Y and Z are partners sharing profits and losses in the ratio 5:3:2 decide to share the future profits in the ratio 2:3:5. What will be the treatment for workmen compensation fund appearing in the balance sheet on the date if no information is available for the same?a)Distributed to the partners in old profit sharing ratiob)Distributed to the partners in new profit sharing ratioc)Distributed to the partners in capital ratiod)Carried forward to new balance sheet without any adjustmentCorrect answer is option 'A'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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