Question

A, B and C were partners in a firm. A died on 31.3.2018 and the Balance Sheet of the firm on that date was as under:

Balance sheet of A, B and C as at 31.3.2018
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)
Creditors		7,000	Cash at Bank	12,000
General Reserve		9,000	Debtors	32,000
Workmen's Compensation Reserve		10,000	Furniture	30,000
Profit & Loss Account		6,000	Plant	40,000
Capitals:			Patents	8,000
A	40,000
B	30,000
C	20,000	90,000
		1,22,000		1,22,000

On A’s death it was found that patents were valueless, furniture was to be brought down to ₹ 24,000, plant was to be reduced by ₹ 10,000 and there was a liability of ₹ 7,000 on account of workmen's compensation.

Pass the necessary journal entries for the above at the time of A’s death.

Answer 1

Journal
Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
(i)	Revaluation A/c      ...Dr.		24,000
	To Patents A/c			8,000
	To Furniture A/c			6,000
	To Plant A/c			10,000
	(Being value of assets decreased)
(ii)	A’s Capital A/c    ...Dr.		8,000
	B’s Capital A/c    ...Dr.		8,000
	C’s Capital A/c    ...Dr.		8,000
	To Revaluation A/c			24,000
	(Being loss on revaluation t/f to Capital A/cs in old ratio of 1:1:1)
(iii)	Workmen Compensation Reserve A/c     ...Dr.		10,000
	To Workmen Compensation Claim A/c			7,000
	To A’s Capital A/c			1,000
	To B’s Capital A/c			1,000
	To C’s Capital A/c			1,000
	(Being remaining WCR distributed among partners in old ratio of 1:1:1)
(iv)	General Reserve A/c      ...Dr		9,000
	To A’s Capital A/c			3,000
	To B’s Capital A/c			3,000
	To C’s Capital A/c			3,000
	(Being general reserve distributed among partners in old ratio of 1:1:1)
(v)	Profit & Loss A/c         ...Dr.		6,000
	To A’s Capital A/c			2,000
	To B’s Capital A/c			2,000
	To C’s Capital A/c			2,000
	(Being Profit & Loss A/c (Cr. balance) distributed among partners in old ratio of 1:1:1)
(vi)	A’s Capital A/c           ...Dr.		38,000
	To A’s Executor A/c			38,000
	(Being amount due to A t/f to A’s Executor’s A/c)

Working notes:

Dr.	A’s Capital A/c		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Revaluation A/c	8,000	By Balance b/d	40,000
To A’s Executor A/c	38,000	By Workmen Compensation Reserve A/c	1,000
		By General Reserve A/c	3,000
		By Profit & Loss A/c	2,000
	46,000		46,000