Geo, Ho and Io formed a partnership three years ago to run a hairdressing business. They each provided capital to establish the business as follows:Geo ￡20,000;Ho￡12,000; andIo￡8,000.The partnership agreement stated that all profits and losses were to be divided in proportion to the capital contribution.After 18 months Geo provided the partnership with a loan of ￡3,000 in order to finance the purchase of more stock. The loan was to be paid back from the profits of the business.Unfortunately the business was not successful and the partners decided to dissolve the partnership rather than risk running up any more losses. At the time of the dissolution of the partnership its assets were worth ￡20,000. Its external debts were ￡7,000 and none of the debt to Geo has ever been paid.Required:Advise the partners as to how the financial aspects of the dissolution will be conducted and how the assets will be distributed. (10 marks)

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