Question

Kriti, Hina and Nidhi were partners sharing profits in the ratio of 3 : 2 : 1. Nidhi retired. On the date of her retirement, Workmen Compensation Fund stood in the Balance Sheet at Rs.1,50,000. Workmen Compensation Claim was Rs.1,20,000. How much amount of Workmen Compensation Fund will be credited to Nidhi’s Capital Account?

• A. Rs.30,000
• B. Rs.10,000
• C. Rs.5,000
• D. Rs.15,000

Hint:

When a specific fund like Workmen Compensation Fund is created, any remaining balance after meeting claims is distributed in the profit-sharing ratio.

Answer 1

The Correct Option is C

The Workmen Compensation Fund of Rs.1,50,000 is used to meet the claim of Rs.1,20,000. The remaining balance of Rs.30,000 is distributed among the partners in their profit-sharing ratio of 3 : 2 : 1. \[ {Nidhi’s Share: } Rs.30,000 \times \frac{1}{6} = Rs.5,000 \]