At the time of admission of a new partner, in case there is no workmen's compensation claim, the total amount of workmen's compensation fund will be:
- ACredited to old partners' capital account in their old profit sharing ratio.
- BDebited to old partners' capital account in their old profit sharing ratio.
- CCredited to old partners' capital account in their new profit sharing ratio.
- DDebited to old partners' capital account in their new profit sharing ratio.
Solution & Step-by-step Explanation
If there is no claim against the Workmen's Compensation Fund at the time of admission, the entire balance represents accumulated unappropriated profit created out of past earnings. It belongs entirely to the old partners and is credited to their capital accounts in their old profit-sharing ratio.