Page 224 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Unit 10: Liquidation of Companies: Preparation of Accounts

The expenses of liquidation amounted to ` 1,000. The liquidator is entitled to get a commission of notes
2% on all the assets realised except cash. He is also entitled to get 2% commission on the amount
paid to shareholders. Payments were made on 31 December. 2010. Prepare the Liquidator’s
st
Final Statement of Account.
Solution
omega company limited
liquidator’s final statement of account
receipts estimated value payments amount
values realised (`)
(`) (`)
Assets Realised: Liquidator’s Remuneration
Land & Buildings 3,00,000 3,00,000 2% on ` 9,56,000 19,120
Patents 20,000 16,000 2% on ` 4,24,000 8,480

Stock 1,60,000 1,40,000 2% on ` 13,137.25 262.75 27,862.75
Debtors 2,00,000 1,80,000 Liquidator’s Expenses 1,000
Cash 10,000 Debenture-holders 4,00,000
Surplus from Securities 3,00,000 + Arrear of Interest
Amount Received for 1.5 year 30,000 4,30,000
954.25 Preferential Creditors for
Tax, Wages etc. 4,000

Unsecured Creditors 46,000
Return to Contributories:
Pref. Capital 4,00,000
Arrear of Dividend 24,000 4,24,000
Equity Shareholders
On 8,000 shares of ` 9 paid up @
` 1.7614 approx. 14,091.50
9,46,954.25 9,46,954.25
Working Note:
(i) Assets realised = 3,00,000 + 16,000 + 1,40,000 + 1,80,000 + 3,20,000 = ` 9.56,000

(ii) Amount paid to preference shareholders = 4,00,000 + 24,000
= 4,24,000
(iii) Amount left for Equity shareholders:
Total amount received from assets 9,46,000
Less: Liquidator’s commission –
` (19,120+8,480) 27,600
Liquidation Expenses 1,000
Debentures + Interest 4,30,000
Preferential Creditors 4,000

Unsecured Creditors 46,000

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