Here is a compilation of top three problems on liquidation of companies with its relevant solutions.
Problem 1:
The Ultra Optimist Ltd. went into liquidation. Its assets realised Rs 3, 50,000 excluding amount realised by sale of securities held by the secured creditors.
The following was the position:
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Share Capital:
1,000 shares of Rs 100 each Rs 1,00,000 Secured Creditors (Securities realised (Rs 40,000) Rs 35,000 Preferential creditors Rs 6,000 Unsecured creditors Rs 1,40,000
Debentures having a floating charge on the assets of the company Rs 2, 50,000 Liquidation Expenses Rs 5,000 Liquidator’s Remuneration Rs 7,500
Prepare the liquidator’s final statement of account.
Problem 2:
The Balance Sheet of Bubble Ltd. as on 31st Dec. 2004 was as follows:
The company went into liquidation on the date. Prepare Liquidator’s Statement of Account after taking into account the following:
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1. Liquidator expenses and liquidator’s remuneration amounted to Rs 3,000 and Rs 10,000 respectively.
2. Bank loan was secured by pledge of stock.
3. -Debentures and Interest thereon are secured by a floating charge on all assets.
4. Fixed assets were realised at book values and current assets at 80% of book values.
Problem 3:
T. Ltd. was placed in voluntary liquidation on 31st December 2004 when its Balance Sheet was as follows:
The Preference dividends are in arrears from 2001 onwards.
The company’s articles provide that on liquidation, out of the surplus assets remaining after payment of liquidation costs and outside liabilities, there shall be paid firstly all arrears of Preference dividend, secondly the amount paid up on the Preference Share together with a premium thereon of Rs 10 per share, and thirdly any balance then remaining shall be paid to the equity shareholders.
The Bank Overdraft was guaranteed by the directors who were called upon by the Bank to discharge their liability under the guarantee. The directors paid the amount to the Bank.
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The liquidator realised the assets as follows:
Creditors were paid less discount of 5 per cent. The debenture and accrued interest were repaid on 31st March 2005.
Liquidation costs were Rs 3,820 and the liquidators remuneration was 2 per cent on the amount realised.
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Prepare the liquidator’s statement of account.
