Question

how is workmen compensation fund shown in the balance sheet of partnership firm treated at the time if its dissolution​

Answer 1

Answer:

• case 1) if there is no liability against compensation then it is distributed among partners so entry is W.C.reserve a/c dr. To partner's capital a/c
• if there is liability against it like reserve is 50000 and liability is 40000 the 40000 show in realisation a/c debit and credit both side and balance 10000 distributed among partner
• if there is liability more then reaserve like liability is 60000 then 50000 reserve show in cr. side of realisation account and 60000 shown in dr. side by paying it to bank a/c