SECTION A: QUESTION 1 (CLO 1) CASE: GARNER VS. MURRAY RULE Garner, Murray and Wilkins were equal partners with unequal capitals. The assets of the firm on dissolution, after satisfying all the liabilities to creditors and advance from partners was insufficient to repay the capitals in full. There was a deficiency of Rs. 635 and the capital account of Wilkins was showing a debit balance of Rs.263. Nothing could be recovered from Wilkins owing to insolvency. Before the decision in Garner vs. Murray was made, if, at the time of dissolution, a partner owes a sum of money to the firm, he has to pay it to the firm. However, if he is insolvent and the sum which is irrecoverable from an insolvent partner is treated as an ordinary loss. The question arises whether this loss is an ordinary loss to be shared by the solvent partners in the profit sharing ratio or whether it is an extraordinary loss. Required: a) EXPLAIN the need for dissolution of a partnership business. (10 marks) b) EXPLAIN the decisions arise from the above case