give the journal entry to distribute ' WORKMEN COMPENSATION RESERVE' of Rs. 70,000 at the time of retirement of neeti when there is a claim of Rs. 25,000 against it. The firm has three partners raveena, neeti and rajat.
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 .. .. .. |