Question
Gar, Mur and Wil were partners, in a firm, sharing profits and losses equally. Their capitals were not equal. There was no partnership deed. The
Gar, Mur and Wil were partners, in a firm, sharing profits and losses equally. Their capitals were not equal. There was no partnership deed. The firm dissolved on 30th June 2020. The position was as follows, after dissolution:
Balance Sheet as of June 30, 2020
Liabilities | $ | Assets | $ |
Gar capital a/c Mur capital a/c | 2500 314
| Cash Wil capital Loss on realisation | 1916 263 635 |
2814 | 2814 |
Wil became insolvent and could not pay anything against the capital deficiency.
Explain the decision that may be taken due to Wils insolvency. Show workings to support your response.
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