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 rupee 1,50,000. Workmen Compensation Claim was rupee 1,20,000. How much amount of Workmen Compensation Fund will be credited to Nidhi’s Capital Account?

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

Hint:

When distributing a Workmen Compensation Fund upon a partner’s retirement, first deduct the compensation claim, then distribute the remaining balance among the partners based on their profit-sharing ratio.

Answer 1

The Correct Option is C

1. Workmen Compensation Fund in Balance Sheet = rupee 1,50,000 2. Workmen Compensation Claim = rupee 1,20,000 3. Surplus Fund Available for Distribution \[ = rupee 1,50,000 - rupee 1,20,000 = rupee 30,000 \] 4. Nidhi’s Share in the Surplus (Profit Sharing Ratio: 3:2:1) \[ {Nidhi’s Share} = \frac{1}{6} \times rupee 30,000 = rupee 5,000 \] Thus, the amount credited to Nidhi’s Capital Account = rupee5,000 (Option C).