Pillai College of Arts, Commerce & Science (Autonomous) New Panvel
Financial Accounting VDr, Monali Ray & Mrs. Sharavathi.G
Chapter 4
LIQUIDATION OF COMPANIES
Liquidator’s Final Statement of Account
P1
The following are the balances of Z Ltd which were in the hands of the liquidator:
Liabilities Rs
1,000 6% Preference shares of Rs 100 each 1,00,000
2,000 Equity shares of Rs 100 each 2,00,000
2,000 Equity shares of Rs 100 each, Rs 75 paid up 1,50,000
Loan from bank (secured on stock) 1,00,000
Creditors 3,50,000
9,00,000
Assets Rs
Fixed assets 2,00,000
Stock 1,20,000
Debtors 2,40,000
Cash 40,000
Profit & loss A/c 3,00,000
9,00,000
i. Calls on partly paid shares were made but the amount due on 200 shares were found
irrecoverable
ii. The assets realized the following
a. Fixed assets Rs 1,68,000
b. Stock Rs 1,10,000
c. Debtors Rs 2,30,000
iii. Cost of liquidation Rs 5,000
Prepare Liquidator’s Final Statement of Accounts
P2
X Ltd. Went into voluntary liquidation on 31st December, 2021:
i. The assets realized: Stock Rs 1,00,000, Plant Rs 75,000 and Cash Rs 625
ii. Liquidator’ expenses Rs 1,375
iii. Creditors Rs 90,000 (preferential Rs 8,000)
iv. 6% Debentures Rs 80,000. Interest paid up to 30th April, 2022
v. Liquidator’s remuneration 3% on assets realized except cash and 2% on the amount
distributed to unsecured creditors excluding preferential creditors
Prepare Liquidator’s Final Statement of Accounts
P3
Y Ltd went into voluntary liquidation on 1st January, 2022. The subscribed capital of the
company consists of:
40,000 6% preference shares of Rs 10 each
50,000 Equity shares of Rs 10 each, Rs 6 paid up
1
Pillai College of Arts, Commerce & Science (Autonomous) New Panvel
Financial Accounting VDr, Monali Ray & Mrs. Sharavathi.G
i. The assets realized Rs 3,50,000
ii. Liquidation expenses Rs 9,800
iii. The liquidator’s remuneration Rs 11,000 and 21/2% on the amount paid to preference
shareholders as capital and dividend
iv. Unsecured creditors Rs 20,000
Prepare Liquidator’s Final Statement of Accounts
P4
From the following data relating to a company which went into liquidation prepare
Liquidator’s Final Statement of Accounts
i. Cash with the liquidator (after all assets realized and secured creditors and
debenture holders were paid) is Rs 7,50,000
ii. Preferential creditors to be paid Rs 35,000
iii. Unsecured creditors Rs 2,30,000
iv. 5,000 10% preference shares of Rs 100 each fully paid
v. 3,000 Equity shares of Rs 100 each, Rs 75 paid up
vi. 7,000 Equity shares of Rs 100 each, Rs 60 paid up
vii. Liquidator’s remuneration is 2% on the payments to preferential and other
unsecured creditors
P5
A liquidator is entitled to remuneration
2% on the assets realised
3% on the amount distributed to Preferential creditors
3% on the amount paid to Unsecured creditors
The assets realised Rs 40,00,000
The amount realised from secured asset Rs 16,00,000
The payment was as follows:
Liquidation expenses Rs 50,000
Secured creditors Rs 15,00,000
Preferential creditors Rs 1250000
Unsecured creditors Rs 15,00,000
15,000 Equity share capital of Rs 100 each
Prepare Liquidator's Final Statement of Accounts
P6
Tetra Limited went into liquidation on 31st March, 2022:
The assets and liabilities are given below:
Liabilities Rs
1,00,000 Equity shares of Rs 10 each fully paid 10,00,000
10% Preference shares of Rs 100 each fully paid 12,00,000
Securities premium 1,00,000
5% Debentures 2,00,000
Interest on debentures 5,000
Bank overdraft 1,16,000
2
Pillai College of Arts, Commerce & Science (Autonomous) New Panvel
Financial Accounting VDr, Monali Ray & Mrs. Sharavathi.G
Creditors 2,30,000
28,51,000
Assets Rs
Freehold property 11,85,000
Plant 6,03,000
Vehicles 1,15,000
Stock 3,72,000
Debtors 1,48,000
Profit & Loss A/c 4,28,000
28,51,000
i. The company’s Articles provide that on liquidation out of the surplus assets
remaining after payment of liquidation cost and outside liabilities, it shall be applied
towards arrear preference dividend and secondly to preference shareholders with a
premium thereon at Rs 10 per share and finally to equity shareholders.
ii. Creditors were paid less discount of 5%
iii. Debenture holders were paid along with accrued interest up to 30th June, 2022
iv. Liquidator’s remuneration was 2% on assets realized
v. Cost of liquidation was Rs 7,640
vi. The assets realized as follows:
Freehold property 14,25,000
Plant 5,05,000
Vehicles 1,18,000
Stock in trade 3,00,000
Debtors 1,20,000
Prepare Liquidator’s Final Statement of Account
P7
Following are the assets and liabilities of Alpha Ltd as on 31-03-2022:
Liabilities Rs Assets Rs
14% Preference Shares of Rs 100 each fully 4,00,000 Land 40,000
paid
8,000 Equity shares of Rs 100 each Rs 60 paid 4,80,000 Building 1,60,000
up
14% Debentures (having a floating charge on 2,30,000 Plant & machinery 5,40,000
all assets)
Interest outstanding on debentures 32,200 Patents 40,000
Loan on Mortgage on Land & building 1,50,000 Stock 1,00,000
Creditors 1,17,800 Debtors 2,30,000
Cash at bank 60,000
Profit & Loss A/c 2,40,000
14,10,000 14,10,000
i. The company went into liquidation on 31-03-2022
ii. Creditors include preferential creditors amounting to Rs 30,000
iii. The assets realized as follows:
3
Pillai College of Arts, Commerce & Science (Autonomous) New Panvel
Financial Accounting VDr, Monali Ray & Mrs. Sharavathi.G
Land Rs 80,000
Buildings Rs 2,00,000
Plant & machinery Rs 5,00,000
Patents Rs 50,000
Stock Rs 1,60,000
Debtors Rs 2,00,000
iv. Liquidation expenses amounted to Rs 29,434
v. Liquidator is entitled to commission of 2% on all assets realized (except cash at bank)
and 2% on the amounts distributed to unsecured creditors excluding preferential
creditors
vi. Interest on mortgage loan to be ignored
Prepare Liquidator’s Final Statement of Account
