Loss due to insolvency of one partner, Question is silent
This query is : Resolved
25 June 2008
In a partnership question, there is loss due to insolvency of one partner.
Nothing has been given about the ratio, in which the loss is to be borne by remaining partners.
Then, whether
a) loss will be borne in PSR by partners or
b) as per Garner vs. Murray
Should the student make note of it or
Nothing has been given about the ratio, in which the loss is to be borne by remaining partners.
Then, whether
a) loss will be borne in PSR by partners or
b) as per Garner vs. Murray
Should the student make note of it or
25 June 2008
Loss should be borne by the SOLVENT partners in the Capital ratio..
IF partners have two accounts in the prob (Capital and Current A/C)...it represents...fixed capital method..then the loss should be shared in the RATIO OF BALANCE IN THE CAPITAL A/C -----FIXED CAPITAL METHOD
If they dont have capital account, it represents, capitals are flectuating... Loss should be shared in the ADJUSTED CAPITAL RATIO...where ADJUSTED CAPITAL is equal to OPENING CAPITAL Plus transfer of reserves+adjustment for Goodwill+JLP adjustment..... (All adjustments except Realisaion profit/Loss)
IF partners have two accounts in the prob (Capital and Current A/C)...it represents...fixed capital method..then the loss should be shared in the RATIO OF BALANCE IN THE CAPITAL A/C -----FIXED CAPITAL METHOD
If they dont have capital account, it represents, capitals are flectuating... Loss should be shared in the ADJUSTED CAPITAL RATIO...where ADJUSTED CAPITAL is equal to OPENING CAPITAL Plus transfer of reserves+adjustment for Goodwill+JLP adjustment..... (All adjustments except Realisaion profit/Loss)
26 June 2008
Thanks for it Sir,
but all this will apply when question specifically ask for "Garner Vs. Murray"
otherwise
as per sec48 of Partnership, On dissolution, any deficiency including capital is to be brought in by partners in the ration in which they are entitled to receive profits. ie PSR
Also, in some text books i read that ,by default, deficiency will be borne in PSR only.
Please confirm and reply.
Thanks again.
but all this will apply when question specifically ask for "Garner Vs. Murray"
otherwise
as per sec48 of Partnership, On dissolution, any deficiency including capital is to be brought in by partners in the ration in which they are entitled to receive profits. ie PSR
Also, in some text books i read that ,by default, deficiency will be borne in PSR only.
Please confirm and reply.
Thanks again.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Taxable or Tax exempt
- CAPITAL GAIN BASE ON NOTIFICATION
- Form 140 tds
- ADVANCE PAYMENT OF ADVOCATE
- NRI starting business in India
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- GST not cancelled by tenant
- Sales of goods of amount Rs97 lakhs to a party
- CREDIT NOTES WITHOUT GST
- Eway bill not cancelled within 24 hous what can be due
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
