Page 223 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Accounting for Companies – II

notes (2) Division of Surplus:
Amount available for payment 4,00,000

Less: Pref. Capital 1,50,000
Dividend 9,000
Equity capital 90,000 2,49,000
Surplus 1,51,000

1
Less: for Preference Shareholders
3
1 of 1,51,000 50,333
3
2 for Equity Shareholders. 1,00,667
3

(3) Preference Dividend: 1,50,000 ×6 = 9,000
100
(4) Unsecured Creditors: = 68,000 – 6,000 = ` 62,000
Illustration 9 (Division of Loss)
Omega Company Limited went into liquidation on 30 June, 2010. Its Balance Sheet on that date
th
is given below:
Balance sheet
liabilities ` assets `
Share Capital: Land & Buildings 3,00,000
4,000; 6% Preference Shares of ` 100 each 4,00,000 Machinery 3,00,000
8,000 Equity shares of ` 10 each; ` 9 paid up 72,000 Patents 20,000

4,000 Equity Shares of ` 10 each; ` 7 paid up 28,000 Stocks 1,60,000
4,000; 5% Debentures of ` 100 each 4,00,000 Debtors 2,00,000
Outstanding Interest on Cash 10,000
Debentures 20,000
Creditors 40,000
Outstanding Tax, Wages etc. 4,000
Bills Payable 6,000
Bank Overdraft 20,000
9,90,000 9,90,000
Preference Shares’ dividend is in arrear for one year. Arrears are to be paid at the time of
liquidation. Preference shareholders have the priority over equity shareholders. Bank overdraft
was on the mortgage of machinery. The assets were realised as follows:
Land and Buildings ` 3,00,000, Machinery ` 3,20,000, Patents ` 16,000, Stock ` 1,40,000, and
Debtors ` 1,80,000.

218 lovely professional university