Page 226 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Unit 10: Liquidation of Companies: Preparation of Accounts

Journal entries in the Books of videshi co. ltd. notes
Date particulars l.f. ` `
Building A/c Dr. 2,00,000
Machinery and Plant A/c Dr. 80,000
Stock A/c Dr. 30,000
Debtors A/c Dr. 44,000
To Swadeshi Co. Ltd. 3,00,000
To Capital Reserve A/c 54,000
(Above assets of Swadeshi Co. Ltd. being purchased)
Swadeshi Co. Ltd. Dr. 3,00,000
To Cash A/c 120,000
To Share Capital A/c 180,000
(Payment being made to Swadeshi Co. Ltd. by shares and cash.)
Illustration 11 (Receiver’s Receipt and Payment Account)
Following was the Balance Sheet of Oxford Ltd. as on 31 December, 2010:
st
liabilities ` assets `
Issued Capital: Sundry Assets 2,39,500
500; 7% Preference shares of ` 100 each fully paid 50,000 Buildings 50,000
750 Equity shares of ` 100 each ` 95 paid 71,250 Preliminary Expenses 5,000
5% Debentures 1,00,000 Profit and Loss A/c. 16,750
Loan on Mortgage 40,000
Bank Account 12,500
Creditors including ` 27,500 for assessed tax 37,500
3,11,250 3,11,250
The mortgage was secured on the buildings and the debentures were secured by floating
charge on the Sundry Assets. The Debenture-holders appointed a Receiver who took charge of
the Sundry Assets amounting to ` 1,57,500. A liquidator was also appointed as the company
went into voluntary liquidation. The Receiver realised the assets for ` 1,47,500 and his costs
and remuneration were ` 750 and ` 1,000 respectively. ` 45,000 were realised from buildings
and ` 72,500 from the sale of the remaining Sundry Assets. The bank had the guarantees of the
directors amounting to ` 11,000 which was duly honoured by them. The costs of the liquidation
were ` 1,500 and the liquidator’s remuneration amounted to ` 625. Prepare the Accounts of the
Liquidator and the Receiver.
Solution

oxford co. ltd.
receiver’s receipts and payments account
particulars ` particulars `
Assets Realised 1,47,500 Cost of Receiver 750
Building Realised 45,000 Receiver’s Remuneration 1,000
Less: Mortgage 40,000 5,000 Preferential Creditors for Income Tax 27,500
Payment to Debenture-holders 1,00,000
Balance given to the liquidator 23,250
1,52,500 1,52,500

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