The position of Badluck Ltd. on its liquidation is as under: 7,500, 9% Preference shares of ₹100 each fully paid up 1,00,000, Equity shares of ₹10 each fully paid up 50,000 Equity shares of ₹5 each, ₹3 paid up Calls rece
CS Executive · Company Accounts & Auditing Practices · PYQS · June 2019
The position of Badluck Ltd. on its liquidation is as under: 7,500, 9% Preference shares of ₹100 each fully paid up 1,00,000, Equity shares of ₹10 each fully paid up 50,000 Equity shares of ₹5 each, ₹3 paid up Calls received in advance ₹20,000. Preference dividends are in arrears for two years. Amount left with the liquidator after discharging all liabilities is ₹11,80,000. Articles of Association of the company provides for payment of preference dividend arrears in priority to return of equity capital. You are required to prepare the Liquidator's Final Statement of Account and ascertain amount payable per share to equity shareholders.
Answer & Explanation:
Liquidator's Final Statement of Account of Badluck Ltd. Particulars Amount (₹) Particulars Amount (₹) Cash 11,80,000 Calls in advance 20,000 Amount received from equity shareholders of ₹5 each (50,000*2) Contributors 1,00,000 Preference Dividend 1,35,000 Preference Shareholders 7,50,000 Equity Shareholders of ₹10 each (₹3 per share i.e. 100000 shares * ₹3 per share) 3,00,000 Equity Shareholders of ₹5 each (₹1.5 per share i.e. 50000 shares * ₹1.5 per share) 75,000 Total 12,80,000 Total 12,80,000 Working Note: Particulars Amount (₹) Cash Available 12,80,000 Less: Calls in Advance (20,000) Payment of Preference Dividend (1,35,000) Preference Shareholders (7,50,000) Disposable Amount 3,75,000 No. of equivalent equity shares 1,00,000 shares of ₹10 each = 2,00,000 shares of ₹5 each 50,000 shares of ₹5 each = 50,000 shares of ₹5 each Total Shares = 2,50,000 shares of ₹5 each Final payment to equity share holder per share = 375000 / 250000 = ₹1.5 per shares to equity shareholders of ₹5 each Therefore, payment to equity shareholder of ₹10 each = ₹3 per share
Topics: Liquidation of Companies
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