Page 221 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Accounting for Companies – II

notes Working Note:

Amount available for shareholders—
= ` (4,04,000-4000-64,000) = ` 3,36,000
Less: Calls-in-advance on Equity and Preference shares (48,000 + 8000) 56,000

Amount to Return the Capital 2,80,000

Less: First Equity shareholders will get ` 2 each they have paid more and
Preference shares have no priority over return of capital

(20,000 × 2) 40,000
2,40,000

Now, ` 2,40,000 will be divided among the Preference Shareholders and Equity Shareholders in
the ratio 20,000:20,000 or 1:1 or ` 1,20,000: ` 1,20,000

Thus, Equity Shareholders will get ` 1,20,000 + ` 40,000 = ` 1,60,000
1,60,000
Each Shareholder will get = = ` 8
20,000
Preference Shareholders will get ` 120,000

1,20,000
Each Shareholder will get = = ` 6
20,000
Illustration 8 (Division of Surplus among Preference Shareholders)

Satyam Ltd. went to voluntary liquidation on 1 Jan., 2011. The liquidator realised all the assets
st
and his commission was 3% on realisation of assets and 2% on distribution to shareholders. The
following was position on that date:
`
Cash or realised of assets 5,00,000

Liquidator Expenses 9,000
Unsecured Creditors (including salary and wages for one month
before liquidation ` 6,000) 68,000
5,000; 6% Preference shares of ` 30 each (Divided paid upto 31-12-2009) 1,50,000

10,000 Equity shares ` 10 each ` 9 per share called up and paid up 90,000
General Reserve 1,20,000

P&L A/c 20,000
Preference Shareholders have the right to receive 1/3 of the surplus remaining after repaying the
Equity Share Capital. Prepare Liquidator’s Statement of Account.

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