Page 216 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Unit 10: Liquidation of Companies: Preparation of Accounts

Working Note: notes
(1) Amount available for unsecured creditors and liquidator’s remuneration thereon–

`
Total Amount available 80,000
Less: Cost of Liquidation 500
Liquidator’s remuneration on assets realised and Preferential
Creditors (2,400 +100)
25,00
6% Debentures + Interest Accrued 51,500
Preferential Creditors 5,000
59,500

Amount available for unsecured
creditors and Liquidator’s remuneration 20,500

20,500 ×2
Less: Liquidator’s Remuneration 401.96
102
Amount for Unsecured Creditors 20,098.04

(2) In the case of solvency of the company, interest on debentures is paid upto the date of
payment.
Illustration 4 (Interest on Debentures up to the Date of Commencement of Liquidation)

Bombay Company Limited went into liquidation on 31 December, 2010. Its capital is divided
st
into 10,000 equity shares of ` 50 each. Its capital and liabilities on this date were as follows:
Cash-in-hand ` 750, Realised from Stock ` 29,600, from Book Debts ` 49,200, from Furniture
` 1050, Investments with Bank for Overdraft of ` 4,900.
Unsecured Creditors ` 53,775, Preferential Creditors ` 5,295, Bank Overdraft ` 4,000. 6%
th
Debentures having a floating charge and on which interest has been paid up to 30 June, 2010
` 44,000.
The bank, after deducting its amount from investment of ` 4,900, gave the surplus to the
liquidator. Debentures were paid up to 30 June, 2011.
th
Remuneration of the Liquidator: 3% on net amount realised (excluding the amount given to
secured creditors, but including cash-in-hand); 2% on the amount paid to unsecured creditor
(excluding preferential creditors). Cost of liquidation amounted to ` 1,015.
Prepare Liquidator’s Final Statement of Account and find out the amount paid to unsecured
creditors.
Solution
Bombay company limited
liquidator’s final statement of account
receipts amount payments amount
(`) (`)
Assets Realised: Liquidators Remuneration:
Cash-in-Hand. 750 `
Book Debts 49,200 3% on ` 81,500 2,445

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