if No claims against workmen compensation exists then what Journal entry will be passed ........

General Accounting Principles Partnership

if No claims against workmen compensation exists then what Journal entry will be passed?

workmen compensation reserve a/c dr.

to capital/current a/cs

workmen compensation reserve a/c dr.

to new partner's capital/current a/cs

workmen compensation reserve a/c dr.

to old partners capital/current a/cs

old partner's capital/current a/c dr

to workmen compensation reserve a/cs

In such a case, entire amount of reserve is transferred to old partner's capital/current accounts in their old profit sharing ratio.

The journal entry passed is:

workmen's compensation reserve A/c Dr.

To old partner's capital/current A/cs

(being the amount of workmen compensation reserve credited to old partners' capital a/cs in old profit-sharing ratio)

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