Question

20. Give the Journal entry to distribute ‘Workmen Compensation Reserve of
370,000 at the time of retirement of Neeti when there is a claim of $25,000
against it. The firm has three partners Raveena, Neeti and Rajat.​

Answer 1

Their ratio will be 1:1:1.

Reserve(to be ditributed) = 70,000 - 25,000 = Rs.45,000

JOURNAL ENTRY:

PARTICULARS

L.F.

DEBIT AMOUNT

CREDIT AMOUNT

1)Workmen’s compensation reserve A/C..Dr

To raveena’s capital A/C.

To neeti’s capital A/C.

To Rajat’s capital A/C.

(Being workmen’s compensation distributed among all partners in their profit sharing ratio 1:1:1)

45,000

..

..

..

..

..

..

..

15,000

15,000

15,000

..

..

..