Question

A, B and C were partners in a firm. A died on 31st March, 2026 and the Balance Sheet of the firm on that date was as under:

Liabilities	₹	₹	Assets	₹
Sundry Creditors		7,000	Cash at Bank	12,000
General Reserve		27,000	Sundry 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	90,000	Deferred Advertisement Expenditure	18,000
B	30,000
C	20,000
		1,40,000		1,40,000

On A’s death it was found that patents were of nil value, 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 Entries
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
2026
Mar 31	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 the decrease in values of assets recorded)
Mar 31	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 revaluation loss distributed equally among partners)
Mar 31	General Reserve A/c   ...Dr.		27,000	-
	Profit & Loss A/c   ...Dr.		6,000	-
	To A’s Capital A/c		-	11,000
	To B’s Capital A/c		-	11,000
	To C’s Capital A/c		-	11,000
	(Being accumulated profits and reserves distributed)
Mar 31	Workmen’s Compensation Reserve A/c   ...Dr.		10,000	-
	To Provision for Workmen’s 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 claim recorded and surplus reserve distributed)
Mar 31	A’s Capital A/c   ...Dr.		6,000	-
	B’s Capital A/c   ...Dr.		6,000	-
	C’s Capital A/c    ...Dr.		6,000	-
	To Deferred Advertisement Expenditure A/c		-	18,000
	(Being accumulated loss written off)
Mar 31	A’s Capital A/c   ...Dr.		38,000	-
	To A’s Executor’s A/c		-	38,000
	(Being the closing balance of A’s capital transferred to his executor’s account)