Journal Entries For Wind Up Of Remi Ltd – Valuation, Creditors And Assets

Particular Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper		Valuation	Estimated Realisable Value
1. Assets not specifically charged
Plant & Equipment Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper		98400-16800 =81600	56000
Bills Receivable		57600	33600
Cash at Bank		1200	1200
Stock		146400	112800
Other Assets: Accounts Receivable		69600	42000
		356400	245600
2. Assets subject to specific charge
Land & Building			95000
Land	37200
Building (Book Value – Depreciation)	108000-36000 =72000
Total	109200
Less: Amount Owing ($81600+2400) (Gitman, Juchau and Flanagan, 2015)	(84000)	27400	11000 (95000-84000)
Total Assets			256600
Total estimated realisable value			256600
3. Less preferential creditors entitled to priority over holders of debentures under a floating charge
Salaries and wages			$1680
			$254920
4. Less amounts owing and secured by debenture or floating charge over company assets (Mills and Woodford, 2015)
Debentures		$34560+$1440	$36000
			$218920
5. Less preferential creditors			–
Estimated amount available to creditors			$218920
6. Creditors (unsecured)
Trade creditors	108000+3600	$111600
Income tax payable	4800	$4800	$116400
Balance available to shareholders			$102520
Payment of dividend in arrear			$14400
Amount to be distributed among shareholders			$88120
Share capital issued
Preference share capital	$60000
Share capital A	$108000
Share capital B	$60000		$228000
Share capital paid
Preference share capital	$60000
Share capital A	$108000
Share capital B	$36000		$204000

(Amount in $)

Liquidation A/c Dr 372000

Accounts Receivable Cr. 69600

Bills Receivable Cr. 57600

Inventory Cr. 146400

Plant & Equipment Cr. 98400

(Assets accounts transferred to liquidation account)

Accumulated Depreciation (Plant & Machinery) 16800

Liquidation Cr. 16800

(Contra-assets transferred to Liquidation Account)

Cash A/c Dr. 2412000

Liquidation A/c Cr. 2412000

(Assets sold for cash except land and building at the amount

Realised at completion of winding up) (Note 1)

Liquidation A/c Dr. 9120

Accounts Payable Cr. 3600

Salary and Wages Cr. 1680

Accrued Interest on mortgage Cr. 2400

Accrued Interest on Debenture Cr. 1440

(Unrecorded liabilities recorded in liquidation account)

Accounts Payable A/c Dr. 2400

Liquidation A/c Cr. 2400

(Discount allowed by creditors)

Mortgage Loan A/c Dr 81600

Accrued Interest A/c Dr. 2400

Cash A/c Dr 6000 (90000-84000)

Accumulated depreciation on Building Dr. 36000

Liquidation A/c Cr. ( Loss on sale) 19200

Land & Building Cr. 145200

(37200+108000

(Sale of land & Building by mortgage loan and

return of funds to liquidator (Clarke and Dean, 2014)) (note 1)

Calls in arrear A/c Dr 16000

Share Capital A/c Cr. 16000

(Call made on B ordinary shares)

Cash A/c Dr. 16000

Call in arrear A/c Cr. 16000

(Being full cash received on calls in arrear)

Liquidation Expenses A/c Dr. 960

Debenture A/c Dr. 34650

Accrued Interest on debenture A/c Dr. 1440

Arrear on dividend 14400

Liquidation Remuneration A/c Dr. 4800

Salary & Wages Payable A/c Dr 1680

Accounts Payable A/c Dr 105600

Income Tax Payable A/c Dr 4800

Cash A/c Cr. 1 68330

(Liabilities paid in priority order)

Preference Shares 60000

Share Capital A Ordinary Shares A/c Dr 108000

Share Capital B 58000

Share Holder Distribution A/c 226000

(Transfer share capital account to shareholder’s account)

Liquidation A/c Dr. 26640

Retained Earnings Ac Cr. 14640

General Reserve A/c Cr. 12000

(Transfer of retain earnings to Liquidation account) (Note 2)

Shareholders Distribution A/c Dr 159840

Liquidation A/c Cr 159840

(Being deficiency transferred to liquidation A/c)

Shareholders Distribution A/c Dr 99300

Cash A/c Cr. 99300

(Final payment to shareholders as per schedule) (Note 3)

Note 1

Actual amount realised at sale of assets:

Inventories $112800

Plant and Equipment $52800

Bills receivable $33600

Accounts Receivable $42000

Total $241200

Note2

Liquidation

Particular	Amount in $	Particular	Amount in $
Plant & Equipment (net of depreciation)	81600	Cash (sale of assets)	241200
Bills Receivable	57600	Balance c/d (loss on liquidation)
Accounts Receivable	69600		133200
Inventory	146400
Loss on sale of Land & Building	19200
	374400		374400
Balance b/d	133200
General Reserve	12000
Retained Earnings	14640	Balance c/d (deficiency)	159840
	159840		159840

Note 3

It has been assumed that amount has been returned to liquidator after reducing unrecorded accrued interest on mortgage loan as well as principal amount of mortgage loan (Dagwell, Wines and Lambert, 2015).

PartiCULAR	No. of Shares	Paid	Notional Call	Notional Refund (.400 cents)	Actual Refund	Defeceincy Share
12 % Preference Share	50000	60000		20000	20000	40000
A Ordinary SHares	90000	108000		36000	36000	54000
B Ordinary Shares	100000	60000	40000	40070	19930	79930
Total	240000	228000	40000
Balance of Cash b/d	80070
Calls in arrear	16000
Total	96070
Cash Available			96070
TOTAL DEFECIENCY	159840
Total Notional Cash per share	=96070/240000 =.400 cents

Particular	Amount in $	Particular	Amount in $
Plant & Equipment (net of depreciation)	81600	Cash (sale of assets)	241200
Bills Receivable	57600	Balance c/d (loss on liquidation)
Accounts Receivable	69600		133200
Inventory	146400
Loss on sale of Land & Building	19200
	374400		374400
Balance b/d	133200
General Reserve	12000
Retained Earnings	14640	Balance c/d (deficiency)	159840
	159840		159840

Particular	Amount in $	Particular	Amount in $

Cash (sale of assets)	241200	Liquidation Expenses A/c	960
Cash Balance Transferred	1200	Debenture A/c	34650
Balance from secured creditor	6000	Accrued Interest on debenture A/c	1440
		Arrear on dividend	14400
		Liquidation Remuneration A/c	4800
		Salary & Wages Payable A/c	1680
		Accounts Payable A/c	105600
		Income Tax Payable A/c	4800
		Balance Carried down	80070

References

Clarke, F. and Dean, G., 2014. Corporate Collapse: Regulatory, Accounting and Ethical Failure. In Accounting and Regulation (pp. 9-29). Springer New York.

Dagwell, R., Wines, G. and Lambert, C., 2015. Corporate accounting in Australia. Pearson Higher Education AU.

Gitman, L.J., Juchau, R. and Flanagan, J., 2015. Principles of managerial finance. Pearson Higher Education AU.

Mills, A. and Woodford, W., 2015. Company Accounting. Pearson Higher Education AU.

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