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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.
Answer
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