Question

Following was the Balance Sheet of Janata Ltd. as on 31 si December, 2017.

Liabilities	Rs.	Assets	Rs.
Share Capital :		Goodwill	2,24,000
2,000 8% Preference Shares of Rs.100 each fully paid	2,00,000	Land and Building	4,36,000
4,000 Equity Shares of Rs. 100 each Rs. 80 paid-up	3,20,000	Plant and Machinery	1,80,000
6,000 Equity Shares of Rs. 100,each Rs. 70 paid-up	4,20,000	Furniture	20,000
8% Debentures (having a floating charges on all assets)	2,00,000	Office Equipments	40,000
Debenture Interest	8,000	Stock	1,98,000
Creditors	3,20,000	Debtors	1,70,000
		Bills Receivable	44,000
		Cash in Hand	16,000
		Profit and Loss A/c	1,40,000
	14,68,000		14,68,000

The company went into voluntary liquidation as on that date :
(a) The preference dividend was in arrears for 3 years and as per the ides it was to be returned before returning Equity Capital. 
(b) Sundry creditors include a loan of Rs. 80,000 secured on the hypothecation of Plant and Machinery and Preferential creditors of Rs.20,000
(c) The Liquidator realised the assets as follows :
Land and building Rs. 4,30,000, Plant and Machinery Rs. 1,00,000, Office Equipment Rs. 25,000, Furniture Rs. 16,000, Stock Rs. 1,40,000, Debentures Rs. 1,20,000, and Bills Receivable Rs. 28,000.

(d) Legal charges on Liquidation amounted to Rs. 2,000. The Liquidation Expenses were Rs. 5,200. The Liquidator's remuneration was fixed at Rs. 2,000 plus, 2% on sale of assets, plus 4 % on the amount distributed to unsecured creditors. 
(e) There was a typewriter which was completely written off from the books of accounts but liquidator sold it for Rs.1,000 which was not included in the amount of office equipment above. 
Prepare Liquidator's  Statement of Account if the amounts were paid on 31 at March, 2018.

Answer 1

Books of Janata Ltd.
Liquidator's Final Statement of Account

Particulars	Rs.	Rs.	Particulars	Rs.	Rs.
To Balance b/d (Opening Cash)		16000	By Legal Charges		2,000
To Assets Realised			By Liquidator's Remuneration(W. N. 1)		28,000
land & Building	4,30,000		By Liquidation Expenses		5,200
Plant & Machinery (W. N. - 4)	20,000		By Preferential Creditors		20,000
Office Equipment (25,000 + 1,000)	26,000		By 8% Debentures	2,00,000
Furniture	16,000		( +) Debenture Interest	8,000
Stock	1,40,000		( +) Outstanding Interest	8,000	2,16,000
Debtors	1,20,000		By Unsecured Creditors		2,40,000
Bills Receivable	28,000	7,80,000	By Preference Shareholder :
To Equity Shareholder - (2)			Capital	2,00,000
(Call @ 0.32 per share on 6,000 Equity Shares)		1,920	(+) Dividend (W. N. 3)	48,000	2,48,000
			By Equity Shareholder - (1)		38,720
			(Refund @ Rs.9.68 per share on 4,000 Equity Shares)
		7,97,920			7,97,920

Working Notes :
(1) Liquidator's Remuneration :
(a) Fixed                                                                        Rs.2,000
(b) 2% on Sale of Assets `(2/100xxRs.7,80,000)` (+)     Rs. 15,600
(c) 4% on Amount `(4/100xx2,60,000)`               (+)     Rs. 10,400
                                                                                   ______________

                                                                                    Rs. 28,000

(2) Amount Distributed to Unsecured Creditors :
Total Creditors                                                        Rs. 3,20,000
(-) Secured Creditors (on Plant and Machinery)(-) Rs. 80,000
∴ Unsecured Creditors                                          Rs. 2,40,000
( +) Preferential Creditors                                      Rs. 20,000 

                                                                               Rs.2,60,000
(3) Preference Share Dividend = `8/100xxRs2,00,000xx3 years` = Rs 48000

(4) Plant and Machinery Realised          Rs.1,00,000
(-) Secured For Loan                              Rs.80,000

                                                             Rs.20,000 (Surplus)

(5) Debit Side Total = Rs. 7 ,96,000 (16,000 + 7 ,80,000)
(-) Credit Side Total = Rs.7,59,200 (2,000 + 28,000 +5,200+20,000+2,16,000+2,40,000+2,48,000)

= Rs. 36,800 (Surplus)

∴Equity share capital (1) → Rs.3,20,000 
( +) Equity Share Capital (2) → 4,20,000
Rs. 7,40,000

∴Equity share capital (1) →           Rs. 3,20,000

( +) Equity Share Capital (2)→       Rs. 4,20,000

     Rs. 7,40,000
(-) Rs. 36,800 (Surplus)
Rs.7,03,200

Rs.7,03,200
10,000 Equity Shares ( 4,000 + 6,000)
= ' 70.32 per Equity Share

Equity Shareholder- (1)	Equity Shareholder - (2)
Rs.80.00	Rs.70.00
(-) Rs. 70.32	(-) Rs. 70.32
Rs.9.68	Rs.0.32
(x) 4,000 Equity Shares	(x) 6,000 Equity Shares
Rs. 38,720 Refund	Rs. 1,920 Call

(6) Old Typewriter Sold for Rs. 1,000
∴ Rs. 25,000 (Office Equipment Realised)
(+) Rs. 1,000
Rs. 26,000 .