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Standard XII

Accountancy

Adjustment of Reserves

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Question

Short answer type question:
Give the Journal entry to distribute 'Workmen Compensation Reserve' of Rs. 60,000 at the time of retirement of Sajjan, when there is no claim against it. The firm have three partners Rajat, Sajjan and Kavita.

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Solution

Date

Particulars

L.F.

Debit (Rs.)

Credit (Rs.)

Workmen Compensation Reserve A/c Dr.

60,000

To Rajat’s Capital A/c

20,000

To Sajjan’s Capital A/c

20,000

To Kavita’s Capital A/c

20,000

(Being Workmen Compensation Reserve transferred to partner’s capital a/c in equal ratio)

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Similar questions

Q. Give the Journal entry to distribute "Workmen Compensation Reserve" of

R s . 72, 000

at the time of admission of

Z

, when these is no claim against it. The firm has two partners

X

and

Y

Q. Give the Journal entry to distribute "Workmen Compensation Reserve" of

R s . 72, 000

at the time of admission of

Z

When there is claim of

R s . 48, 000

against it. The firm has two partners

X

and

Y

Lavanya and Priya were partners sharing profits in the ratio of 2 : 1. Pass journal entries for the following transactions at the time of dissolution firm:

(i) Workmen Compensation Reserve stood Rs 1,50,000 in the Balance Sheet and there was no liability towards Workmen Compensation.

(ii) Workmen Compensation Reserve stood at Rs 1,50,000 in the Balance Sheet and liability in respect of it was ascertained at Rs 90,000.

(iii) Workmen Compensation Reserve stood at Rs 1,50,000 in the Balance Sheet and liability in respect of it was ascertained at Rs 1,50,000.

(iv) Workmen Compensation Reserve stood at Rs 1,50,000. In the Balance Sheet and liability in respect of it was ascertained at Rs 2,00,000.

(v) There was no Workmen Compensation Reserve in the Balance Sheet and firm had to pay Rs 40,000 as compensation to the workers.

X, Y

and

Z

who are presently sharing profits and losses in the ratio of

5 : 3 : 2

decide to share future profits and losses in the ratio of

2 : 3 : 5

. Give the Journal entry to distribute 'Workmen Compensation Reserve' of Rs.

1, 20, 000

at the time of change in profit-sharing ratio, when there is a claim of Rs.

80, 000

against it.

Q. (a) X, Y and Z are partners sharing profits and losses in the ratio of 5 : 3 : 2. They admit W as partner for 1/6th share. Following is the extract of the Balance Sheet on the date of admission:

Liabilities	₹	Assets	₹
General Reserve Contingency Reserve Profit and Loss A/c	36,000 6,000 18,000	Advertisement Suspense A/c	24,000

Pass necessary Journal entries.
(b) A and B were partners in a firm sharing profit in 4 : 3 ratio. On 1st April, 2019, they admitted C as a new partner. On the date of C's admission, the Balance Sheet of A and B showed a General Reserve of ₹ 84,000 and a debit balance of ₹ 8,400 in the 'Profit and Loss Account'. Pass necessary Journal entries for the treatment of these items on C's admission.
(c) Give the Journal entry to distribute 'Workmen Compensation Reserve' of ₹ 72,000 at the time of admission of Z, when there is no claim against it. The firm has two partners X and Y.
(d) Give the Journal entry to distribute 'Workmen Compensation Reserve' of ₹ 72,000 at the time of admission of Z, when there is claim of ₹ 48,000 against it. The firm has two partners X and Y .
(e) Give the Journal entry to distribute 'Investment Fluctuation Reserve' of ₹ 24,000 at the time of admission of Z, when Investment (Market Value ₹ 1,10,000) appears at ₹ 1,20,000. The firm has two partners X and Y.
(f) Give the Journal entry to distribute 'General Reserve' of ₹ 4,800 at the time of admission of Z, when 20% of General Reserve is to be transferred to Investment Fluctuation Reserve. The firm has two partners X and Y .
(g) A, B and C were partners sharing profits and losses in the ratio of 6 : 3 : 1. They decide to take D into partnership with effect from 1st April, 2019. The new profit-sharing ratio between A, B, C and D will be 3 : 3 : 3 : 1. They also decide to record the effect of the following without affecting their book values, by passing a single adjustment entry:

	Book Values (₹)
General Reserve	1,50,000
Contingency Reserve	60,000
Profit and Loss A/c (Cr.)	90,000
Advertisement Suspense A/c (Dr.)	1,20,000

Pass the necessary single adjustment entry, through the Partner's Current Account.

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Date	Particulars	L.F.	Debit (Rs.)	Credit (Rs.)
	Workmen Compensation Reserve A/c Dr.		60,000
	To Rajat’s Capital A/c			20,000
	To Sajjan’s Capital A/c			20,000
	To Kavita’s Capital A/c			20,000
	(Being Workmen Compensation Reserve transferred to partner’s capital a/c in equal ratio)

Short answer type question:Give the Journal entry to distribute 'Workmen Compensation Reserve' of Rs. 60,000 at the time of retirement of Sajjan, when there is no claim against it. The firm have three partners Rajat, Sajjan and Kavita.

Date Particulars L.F. Debit (Rs.) Credit (Rs.) Workmen Compensation Reserve A/c Dr. 60,000 To Rajat’s Capital A/c 20,000 To Sajjan’s Capital A/c 20,000 To Kavita’s Capital A/c 20,000 (Being Workmen Compensation Reserve transferred to partner’s capital a/c in equal ratio)

Short answer type question:
Give the Journal entry to distribute 'Workmen Compensation Reserve' of Rs. 60,000 at the time of retirement of Sajjan, when there is no claim against it. The firm have three partners Rajat, Sajjan and Kavita.

Date

Particulars

L.F.

Debit (Rs.)

Credit (Rs.)

Workmen Compensation Reserve A/c Dr.

60,000

To Rajat’s Capital A/c

20,000

To Sajjan’s Capital A/c

20,000

To Kavita’s Capital A/c

20,000

(Being Workmen Compensation Reserve transferred to partner’s capital a/c in equal ratio)