Which combination of statements are correct about Death of a partner-

(A) Ascertainment of new profit sharing ratio and gaining ratio

(B) Preparation of Realization Account

(C) Revaluation of assets and liabilities

(D) Adjustment of capital, if required

Choose the correct answer from the options given below:

When a partner dies, the firm continues with the remaining partners. Let's examine each statement:

Statement A - Ascertainment of new profit sharing ratio and gaining ratio

After death, the remaining partners share profits in a new ratio. The gaining ratio shows how much each surviving partner gains from the deceased partner's share. This is required to adjust goodwill.

✓ This is correct

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Statement B - Preparation of Realization Account

Realization Account is prepared only when the firm is dissolved and assets are sold. Death of a partner does not lead to dissolution - the firm continues with remaining partners.

✗ This is incorrect

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Statement C - Revaluation of assets and liabilities

Assets and liabilities must be revalued to determine the true value of the deceased partner's capital. Any profit/loss on revaluation is distributed among all partners (including deceased) in the old profit sharing ratio.

✓ This is correct

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Statement D - Adjustment of capital, if required

After revaluation, reserves distribution, and goodwill adjustment, the deceased partner's capital account shows the amount due to their legal representatives. Capital adjustments are necessary to settle this amount.

✓ This is correct

Therefore, statements (A), (C) and (D) are correct about death of a partner.

Correct Answer: Option 3