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.
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