Liquidator’s Final Statement of Account - Liquidation of Company, Advanced Corporate Accounting B Com Notes | EduRev

Advanced Corporate Accounting

B Com : Liquidator’s Final Statement of Account - Liquidation of Company, Advanced Corporate Accounting B Com Notes | EduRev

The document Liquidator’s Final Statement of Account - Liquidation of Company, Advanced Corporate Accounting B Com Notes | EduRev is a part of the B Com Course Advanced Corporate Accounting.
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Liquidator’s Final Statement of Account

The main job of liquidator is to collect the assets of the company and realise them and distribute it among right claimants.He maintains a cash book for recording the receipts and payments and submit an abstract of cash book to the court (incase winding up by the Tribunal), and to the company (in case of voluntary winding up). The liquidator also prepares an account of winding up. Such an account is called as Liquidator’s Final Statement of Account.

All the receipts are shown on the debit side of this account. They include the following:

a) Amount realised on sale of assets.
b) Amount received from delinquent directors and other officers of the company.
c) Contributions made by the contributories

On the credit side of this account the following payments are shown in the given order:

a) Payment of secured creditors and dues to workmen upto their claim or upto the amount of securities held by secured creditors.
b) Cost of winding up (legal charges).
c) Liquidator’s remuneration.
d) Payment to creditors having a floating charge on the assets of the company.
e) Payment of preferential creditors.
f) Payment of unsecured creditors.
g) Amount paid to preference shareholders.
h) Amount paid to equity shareholders

In the preparation of Liquidator’s Final Statement of Account, the principle of double entry is not involved. It is only a statement although presented in the form of an account.

Form of Liquidator’s Final Statement of Account

 

Receipts

Amount

Payments

Amount

 

Rs.

 

Rs.

Assets:   Legal Charges  

Cash at Bank

 

Liquidator’s remuneration: % on amount realised % on amount distributed Liquidation Expenses or Cost of Winding up Debenture holders or other creditors having a floating charge on the assets of the company Preferential Creditors Other Unsecured Creditors Preference Shareholders (Refund of Capital) Equity Shareholders (Refund of Capital)

 

Cash in Hand

Marketable Securities

Bills Receivables

Trade Debtors

Loans and Advances

Stock in Trade

Work in Progress

Freehold Property

Leasehold Property

Plant and Machinery

Furniture, Fittings, Utensils etc.

Patents, Trade Marks etc. Investments other than Marketable Securities Surplus from Securities Unpaid calls at commencement of winding up

 

Amount received from calls on contributories made in the winding up Other Property

 


Liquidator’s Remuneration or Commission

A liquidator gets remuneration in the form of commission. It is paid as a percentage of the assets realised as well as a certain percentage of the payments made to unsecured creditors. The following points are relevant while calculating liquidator’s remuneration:

1. Commission on assets given as securities to secured creditors – The liquidator gets commission on the surplus from such assets left after making the payment of secured creditors because he makes an effort of realising the surplus of such assets from secured creditors. However, if he sells the assets himself, he gets commission on the total proceeds of such assets.

2. Cash and Bank Balance – If the liquidator is to get a commission on cash and bank balance unless otherwise stated.

3. Unsecured Creditors – If the liquidator is to get a commission on amount paid to unsecured creditors, unsecured creditors will also include preferential creditors for the purpose of calculation of remuneration unless otherwise stated.

If amount available is sufficient to make the full payment of unsecured creditors, the commission can be calculated as follows: 

Comission  Liquidator’s Final Statement of Account - Liquidation of Company, Advanced Corporate Accounting B Com Notes | EduRev

If the amount available is not sufficient to make the full payment on secured creditors, the commission can be calculated as follows:

Comission =   Liquidator’s Final Statement of Account - Liquidation of Company, Advanced Corporate Accounting B Com Notes | EduRev

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