Question

Manoj and Nand were partners sharing profits in the ratio of 3 : 2. Pass journal entries under following situations at the time of dissolution of firm:

1. Workmen Compensation Reserve stood at ₹ 1,00,000 and there was no liability towards Workmen Compensation.
2. Workmen Compensation Reserve stood at ₹ 1,00,000 and liability in respect of it was acertained at ₹ 75,000.
3. Workmen Compensation Reserve stood at ₹ 1,00,000 and liability in respect of it was ascertained at ₹ 1,20,000.
4. Workmen Compensation Reserve stood at ₹ 1,00,000 and liability in respect of it was ascertained at ₹ 1,00,000.

Answer 1

Journal Entry
Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
(i)	Workmen Compensation Reserve A/c    ...Dr.		1,00,000	-
	To Manoj’s Capital A/c		-	60,000
	To Nand’s Capital A/c		-	40,000
	(Being Workmen Compensation Reserve transferred to Partner’s Capital Accounts in their profit-sharing ratio)
(ii)	Workmen Compensation Reserve A/c    ...Dr.		1,00,000	-
	To Realisation A/c		-	75,000
	To Manoj’s Capital A/c		-	15,000
	To Nand’s Capital A/c		-	10,000
	(Being ₹ 25,000 distributed among partners in 3 : 2)
(iii)	Workmen Compensation Reserve A/c    ...Dr.		1,00,000	-
	To Realisation A/c		-	1,00,000
	(Being Workmen Compensation Reserve transferred to Realisation Account)
(iv)	Workmen Compensation Reserve A/c    ...Dr.		1,00,000	-
	To Realisation A/c		-	1,00,000
	(Being Workmen Compensation Reserve transferred to Realisation Account)