Paul and Betty were partners doing business as Granite Stone Co. The firm became
ID: 1199318 • Letter: P
Question
Paul and Betty were partners doing business as Granite Stone Co. The firm became indebted to Monster Equipment Co. The partnership later was dissolved, with Betty leaving the partnership and Paul continuing to operate the business. Monster Equipment sued the former partnership, Paul and Betty, to recover the price of equipment supplied to the firm before Betty withdrew. Betty claims that she is not liable on the debt because at the time she withdrew, the partnership had sufficient assets to pay all firm debts in full. Is Betty liable? State the reasons for your answer
Explanation / Answer
Betty is right on its part. The time when the partnership was broken the assest analysis of the company must have been done and if the partner have utilized it later then betty is not liable to paynow.