Question

Dada, Yuvi and Viru were partners, sharing profits and losses in the ratio 3 : 2 : 1. Their books showed a Workmen Compensation Reserve of ₹ 1,00,000. Workmen’s claim amounted to ₹ 60,000. How will it affect the books of accounts at the time of the dissolution of the firm?

Options

• Only ₹ 40,000 will be distributed amongst partner’s capital account.

• ₹ 1,00,000 will be credited to Realisation Account and ₹ 60,000 will be paid off.

• ₹ 60,000 will be credited to Realisation Account and will be even paid off. Balance ₹ 40,000 will be distributed amongst partners.

• Only ₹ 60,000 will be credited to Realisation Account and will be even paid off.

Answer 1

₹ 60,000 will be credited to Realisation Account and will be even paid off. Balance ₹ 40,000 will be distributed amongst partners.