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Standard XII

Accountancy

Reassessment of Liabilities (Retirement)

On dissolutio...

Question

On dissolution if workmen compensation liability exceeds reserve then what will be the journal entry?

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Solution

Simran,

The following are the two journal entries.

Journal

Date Particulars L.F. Debit
Amount
(Rs) Credit
Amount
(Rs)

Entry 1 For transfer of WCF

WCF Dr.

To Realisation A/c

(Transfer of WCF to Realisation A/c)

Entry 2 For payment of Claim

Realisation A/c Dr.

To Claim against WCF A/c

(Payment of claim against WCF)

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Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
Entry 1	For transfer of WCF
	WCF	Dr.
	To Realisation A/c
	(Transfer of WCF to Realisation A/c)

Entry 2	For payment of Claim
	Realisation A/c	Dr.
	To Claim against WCF A/c
	(Payment of claim against WCF)