Following are the details of various balances relating to Strong Ltd. which went into liquidation on 31 st March, 2016: Liquidator realised ₹5,25,000 from sale of assets and paid-off ₹1,50,000 to secured creditors leavin

CS Executive · Company Accounts & Auditing Practices · PYQS · December 2016
Following are the details of various balances relating to Strong Ltd. which went into liquidation on 31 st March, 2016: Liquidator realised ₹5,25,000 from sale of assets and paid-off ₹1,50,000 to secured creditors leaving a balance of ₹3,75,000 with him Preferential creditors ₹17,500 Unsecured creditors ₹1,15,000 2,500, 10% Preference shares of ₹100 each fully paid 3,500 Equity shares of ₹100 each, ₹60 paid-up 1,500 Equity Shares of ₹100 each, ₹75 paid-up Liquidator is entitled to 2.5% remuneration on payments to preferential and other unsecured creditors. Prepare liquidator's final statement of account.

Answer & Explanation:

Liquidator's Statement of Account Receipt Amount (₹) Payment Amount (₹) To Cash 3,75,000 By Liquidator's remuneration 3312 (Sale of Assets less S.Creditors) By Preferential Creditors 17,500 To Equity Share holders (Call) 23,318 By Unsecured Creditors 1,15,000 (3,500 x 6.6624) By Preference Share Capital 2,50,000 By Equity Share holders (1500 x 8.34) 12,506 3,98,318 3,98,318 Working Note: Remuneration to Liquidator: 2.5% of (17,500 + 1,15,000) = 3,312 Amount loss to be borne by Equity Shareholders Total Cash available with liquidator 3,75,000 Less: Total payment to be made (3312 + 17500 + 115000 + 250000) 3,85,812 Shortfall 10,812 Total Paid-up Equity Capital 2,10,000 + 1,12,500 = 3,22,500 Add: Shortfall Loss to be borne by equity shareholders Loss per share 333312/5000 = 66.6624 Call to be made from 3500 shares = 66.66 - 60 = 6.66 Refund to be made on 1500 shares = 75 - 66.66 = 8.34

Topics: Company Accounts

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