Comprehension Passage
A and B were partners in a partnership firm. Due to the ill health of B they decided to dissolve the firm. The position of Assets and Liabilities on the date of dissolution was:
| Balance Sheet | |||
| Liabilities | Rs. | Assets | Rs. |
| Loan by B | 20,000 | Goodwill | 30,000 |
| Capitals | Furniture | 40,000 | |
| A. 1,00,000 | Building | 90,000 | |
| B. 1,40,000 | 2,40,000 | Debtors | 50,000 |
| Cash | 50,000 | ||
| 2,60,000 | 2,60,000 | ||
It was agreed that following transactions will take place:
A. A wanted to start the business in sole proprietorship So he took Building and Furniture at 10% less than book value.
B. All the debtors proved good except a person C who did not pay Rs. 10,000.
Due to the ill health of B, they decided to dissolve the firm. It comes under ______ form of dissolution.
1
Dissolution by Notice
2
On the happening of certain contingencies
3
Dissolution by court
4
Dissolution by Agreement