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Question
The court can make an order to dissolve the firm when ______.
Options
Some partner have become fully mad.
A partnership deed is fully followed.
Continued future profits are expected.
The firm is running a legal business.
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Solution
The court can make an order to dissolve the firm when some partner have become fully mad.
Explanation:
A court can order the firm to be dissolved for a variety of reasons, including when one or more partners have gone completely insane when a partner becomes permanently incapable of executing his obligations as a partner, when a partner commits wrongdoing that will harm the firm's operations, and so on.
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RELATED QUESTIONS
Distinguish between 'Dissolution of partnership' and 'Dissolution of partnership firm' on the basis of court's intervention.
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Mandar and Prasad are partners in a firm sharing profit & losses in the ratio of 3 : 2. The following is their balance sheet as on 31st March, 2019.
| Liabilities | Amount (₹) | Assets | Amount (₹) | |
| Capital A/c: | Building | 72,000 | ||
| Mandar | 95,000 | Plant & Machinery | 60,000 | |
| Prasad | 1,00,000 | Furniture | 10,000 | |
| Creditors | 4,000 | Debtors | 42,000 | 40,000 |
| Bills Payable | 3,000 | Less: RDD | 2,000 | |
| Bank | 20000 | |||
| 2,02,000 | 2,02,000 |
On 1st April, 2019 Shubham is admitted for 1/2 share on the following terms:
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- Plant & Machinery revalued at ₹ 48,000.
- Building is taken over by Mandar at ₹ 100,000.
- Reserve for Doubtful Debts (RDD) to be increased upto ₹ 4,000.
- The old partners decided to retain half of the amount of goodwill in the business.
- The old partners decided to sacrifice equally.
Prepare Partners' Capital Account Only and show your working clearly.
Complete the following table:
| Debit side total of Capital A/c |
Credit side total of Capital A/c |
Cash brought by Partner |
| ₹ 51,000 | ? | ₹ 17,000 |
