- Prepare journal entries to wind up the affairs of Busto Ltd.
- Prepare the Liquidation account, the Cash account and the Shareholders’ Distribution account, clearly showing the share of cash for each class of shares.
The bank took possession of the land and buildings and sold them for$240,000. After settlement of the debt, including $4,000 of unrecorded interest, any excess funds were paid to the liquidator.
(b) The sale proceeds of assets realised the following amounts in cash:
(c) The liquidation expenses amounted to $2,300. The liquidator’s remuneration was $4,000. The wages payable account includes wages owing to all employees, of which $3,000 is payable to the son of one of the company’s directors.
(d) Payments made by liquidator after negotiation with creditors: Accounts payable $ 95 000
(e) Share capital consisted of:
(f) Calls on shares: The liquidator called up the uncalled balance on ‘B’ ordinary shares and ‘C’ ordinary shares. Holders of 10 000 ‘C’ ordinary shares and 10 000 ‘B’ ordinary shares failed to pay the call and these shares were subsequently forfeited.