A, B and C who are presently sharing profits and losses

14 :-  A, B and C who are presently sharing profits and losses in the ratio of 5 : 3 : 2 decide to share future profits and losses in the ratio of 2 : 3 : 5. Give the Journal entry to distribute ‘Workmen Compensation Reserve’ of Rs 1,20,000 at the time of change in profit sharing ratio, when:

1. No other information is given
2. There is no claim against it

Solution :-