Page 214 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Unit 10: Liquidation of Companies: Preparation of Accounts

Illustration 2 (Liquidator’s remuneration on amount distributed to unsecured creditors) notes
A company went into liquidation on 31st March, when the following Balance Sheet was
prepared:
liabilities amount (`) assets amount (`)
Share Capital: Goodwill 3,000
(2,000 Shares ` 10 each) 20,000 Leasehold Property 2,500
Issued Capital
(1,452 Shares of ` 10 each fully paid) 14,520 Plant and Machinery 3,740
Sundry Creditors: Stock 5,855
Unsecured Creditors 7,716 Sundry Debtors 4,622
Partly Secured Creditors 2,918 Cash 50
Preferential Creditors 405 Profit and Loss A/c. 5,908
Bank Overdraft (Unsecured) 116

25,675 25,675
The Liquidator realised the assets as follows:
Leasehold property which was used in the first instance to pay the partly `
Secured Creditors Pro-rata 1,800
Plant & Machinery 2,500
Stock 3,100

Sundry debtors 4,350
Cash 50

The expenses of liquidation amount to ` 50 and the liquidator’s remuneration was agreed at 2 1 2 %
on the amount realised and 2% on the amount paid to unsecured creditors. Prepare Liquidator’s
Final Statement Account showing the distribution.

Solution

liquidator’s final statement of account
receipts ` payments `
Assets Realised: Liquidator’s Remuneration:
Cash 50 `
Sundry Debtors 4,350 2 1 2 % on ` 11,800 295
Stock 3,100 2% on ` 9,355 187.10 482.10
Plant & Machinery 2,500 Cost of Liquidation 50
Unsecured Creditors 9,355
Return to Contributories:

Shareholders (1,452 Shares @
` 0.07775 per share) 112.90
10,000 10,000

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