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Liquidation of Company
Solution 1
Statement showing the liability of ‘B’ list contributories
Name Date Unpaid Incremental 1500 2000 700 300
Debt P D B S
P 1/01/19 9,000 9,000 3,000 4,000 1,400 600
D 1/04/19 12,000 3,000 -- 2,000 700 300
B 1/08/19 13,500 1,500 -- -- 1,050 450
S 15/09/19 14,500 1,000 -- -- -- 1,000
Total (A) 3,000 6,000 3,150 2,350
Maximum Liability (B) 7,500 10,000 3,500 1,500
Actual liability 3,000 6,000 3,150 1,500
(Lower of A & B)

Working Notes:
1. C will not be liable since he transferred his shares prior to one year preceding the date of winding up.
2. P will not be responsible for further debts incurred after 01.01.2019 (from the date when he ceases to
be a member). Similarly, D & B will not be liable for the debts incurred after the date of their transfer
of shares.
3. The increase between 1st August 2019 and 15th September 2019, is solely the responsibility of S.
Liability of S has been restricted to the maximum allowable limit of ₹ 1,500.

Solution 2
‘P’ will not be liable as he has transferred his share prior to one year preceding the date of winding up.
‘S will not be liable as his transferee X paid calls in advance on becoming the member.
Statement showing the liability of ‘B’ list contributories
Name Date Unpaid Incremental 1000 200 1400 1400
Debt O Q R T
O 04/04/19 42,000 42,000 10,500 2,100 14,700 14,700
Q 08/09/19 57,000 15,000 - 1,000 7,000 7,000
R 11/11/19 85,000 28,000 - - 14,000 14,000
T 01/03/20 95,000 10,000 - - - 10,000
Total (A) 10,500 3,100 35,700 45,700
Maximum Liability (B) 30,000 6,000 42,000 42,000
Actual liability 10,500 3,100 35,700 42,000
(Lower of A & B)

Solution 3
Liquidator’s Statement of Account
Particulars Amount Particulars Amount
To Assets Realized By Liquidation expenses 86,000
Land & Building 6,20,000 By Liquidators remuneration 46,000
Stock 3,10,000 (23,00,000 x 2%)
Plant & Machinery 7,10,000 By Preferential Creditors 1,72,000
Book Debts 6,60,000 23,00,000 (1,05,000 + 67,000 income tax)
By Debenture holders 2,10,000
By Unsecured Creditors 10,85,000
(4,85,000 + 6,00,000)
By Preference Shareholders
Capital 5,00,000
The copyright of these notes is with C.A. Nitin Goel
No part of these notes may be reproduced in any manner without his prior permission in writing.
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(+) Pref. D/d 1,50,000 6,50,000
(5 Lacs x 10% x 3)
By Equityshareholders 51,000
(5,000 x 10.10 + 5,000 x 0.10)
23,00,000 23,00,000
Working Note:
Surplus after payment to Preference shareholders 51,000
(+) Notional call (5,000 shares x 10) 50,000
1,01,000
No. of Shares (5,000 + 5,000) 10,000
Refund per share 10.10

5,000 5,000
Call - 10
Refund (10.10) (10.10)
10.10 Refund 0.10 Refund

Solution 4
Liquidator’s Statement of Account
Particulars Amount Particulars Amount
To Assets Realized 75,700 By Liquidation expenses 45,000
To Assets Realized By Liquidators remuneration 1,29,600
Land & Building 24,50,000 (43,20,000 x 3%)
Plant & Machinery 9,00,000 By Preferential Creditors 75,000
Furniture 2,85,000 By Debenture holders
Patents 90,000 Debentures 10,00,000
Trade receivables 3,15,000
Stock 2,80,000 43,20,000 (+) Interest O/s 1,20,000
(+) Interest O/s 30,000 11,50,000
(10Lacs x 12% x 3/12)
By Unsecured Creditors 7,36,250
(7,75,000*95% )
By Preference Shareholders
Capital 10,00,000
(+) Pref. D/d 1,20,000 11,20,000
(10 Lacs x 12% x 2)
By Equityshareholders
20,000*32.995 = 6,59,900
10,000*47.995 = 4,79,950 11,39,850
43,95,700 43,95,700
Working Note:
Surplus after payment to Preference shareholders 11,39,850
(+) Notional call (20,000 shares x 15) 3,00,000
14,39,850
No. of Shares (20,000 + 10,000) 30,000
Refund per share 47.995

10,000 20,000
Call - 15
Refund (47.995) (47.995)
47.995 Refund 32.995 Refund
The copyright of these notes is with C.A. Nitin Goel
No part of these notes may be reproduced in any manner without his prior permission in writing.
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Solution 5
Liquidator’s Statement of Account
Particulars Amount Particulars Amount
To Cash at Bank 2,40,000 By Liquidation expenses 1,17,736
To Assets Realized By Liquidators remuneration (WN-1) 1,02,224
Plant & Machinery 20,00,000 By Preferential Creditors 1,20,000
Patents 2,00,000 By Debenture holders
Inventory 6,40,000 Debentures 9,20,000
Debtors 8,00,000 36,40,000 (+) Interest O/s 1,28,800
To Surplus from assets pledged (+) Interest O/s 32,200 10,81,000
(9.20 Lacs x 14% x 3/12)
Realized value By Unsecured Creditors 3,51,200
(3,20,000 + 8,00,000) 11,20,000 (4,71,200 - 1,20,000)
-Bank Loan (6,00,000) 5,20,000 By Preference Shareholders
Capital 16,00,000
(+) Pref. D/d 2,24,000 18,24,000
(16 Lacs x 14% x 1)
By Equityshareholders 8,03,840
(32,000 x 25.12)
41,60,000 41,60,000

Working Note:
1)
Computation of Total Remuneration payable to Liquidator
Particulars Amount
2% on Assets realised 47,60,000 x 2% 95,200
(36,40,000 + 11,20,000)
2% on payment made to unsecured creditors 3,51,200 x 2% 7,024
Total Remuneration payable to Liquidator 1,02,224
2)
Surplus after payment to Preference shareholders 8,03,840
No. of Shares 32,000
Refund per share 25.12

Solution 6

Surplus available after discharging all liabilities 20,00,000

(+) Notional call (30,000 shares x 35) + (80,000 x 10) 18,50,000
38,50,000
No. of Shares (20,000 + 30,000 + 80,000) 1,30,000
Refund per share 29.615

20,000 30,000 80,000

Call - 35 10
Refund (29.615) (29.615) (29.615)
29.615 Refund 5.385 Call 19.615 Refund
Amount 5,92,300 1,61,550 15,69,200
Refund Call Refund

The copyright of these notes is with C.A. Nitin Goel

No part of these notes may be reproduced in any manner without his prior permission in writing.
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Solution 7
Computation of Total Remuneration payable to Liquidator
Particulars Amount
2% on Assets realised 50,00,000 x 2% 1,00,000
3% on payment made to Preferential creditors 1,50,000 x 3% 4,500
3% on payment made to Unsecured creditors (Refer W.N) 78,510
Total Remuneration payable to Liquidator 1,83,010
Working Note:
Liquidator’s remuneration on payment to unsecured creditors = Cash available for unsecured creditors
after all payments including liquidation expenses, payment to secured creditors, preferential creditors &
liquidator’s remuneration
= 50,00,000 – 50,000 – 20,00,000 – 1,50,000 – 1,00,000 – 4,500 = 26,95,500
Liquidator’s remuneration = 3/103 x 26,95,500 = 78,510

Solution 8
Calculation of Total Remuneration payable to Liquidator
₹
5% on Assets realised (13,75,000 x 5%) 68,750
8% on payment made to Unsecured creditors (Refer W.N) 7,080
Total Remuneration payable to Liquidator 75,830
Working Note:
Liquidator’s remuneration on payment to unsecured creditors =
Total amount realized ₹13,75,000
Less: Liquidation expenses paid (13,000)
Payment to secured creditors (1,00,000)
Liquidator’s remuneration on assets realized (68,750) (₹1,81,750)
₹11,93,250
Sufficient amount is available for preference creditors (treated as unsecured creditors) therefore
Liquidator’s remuneration on payment to unsecured creditors = 8% x ₹88,500 = ₹7,080
Note: Since the amount of unsecured creditors (other than preferential creditors) is not given in the
question, the above solution is based on the assumption that there are no unsecured creditors (other than
preferential creditors who are treated as unsecured creditors).

Solution 9
Number of equivalent equity shares:
30,000 shares of ₹ 100 each 80 paid up = 30,000 shares of ₹ 100 each 80 paid up
80,000 shares of ₹ 50 each 25 paid up = 40,000 shares of ₹ 100 each 50 paid up
4,00,000 shares of ₹ 10 each fully paid up = 40,000 shares of ₹ 100 each fully paid up
Surplus after payment of all liabilities 24,00,000
(+) Notional call 26,00,000
(30,000 shares x 20) + (40,000 shares *50)
50,00,000
No. of Shares (30,000 + 40,000 + 40,000) 1,10,000
Refund per share 45.4545

Equivalent Shares 30,000 40,000 40,000

Original Shares 30,000 80,000 4,00,000
Call 20 50 -
Refund (45.4545) (45.4545) (45.4545)
Net 25.4545 Refund 4.5455 Call 45.4545 Refund
Amount 30,000*25.4545 40,000*4.5455 40,000*45.4545
7,63,635 Refund 1,81,820 Call 18,18,180 Refund

The copyright of these notes is with C.A. Nitin Goel

No part of these notes may be reproduced in any manner without his prior permission in writing.
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Solution 10
Receiver’s Statement of Account
Particulars Amount Particulars Amount
To Assets Realized 28,75,000 By Receiver expenses 10,000
To Surplus from Assets pledged By Receiver Remuneration 15,000
Realized value By Debenture holders
(Land & Building) 7,50,000 Debentures 15,00,000 15,00,000
-Mortgage Loan (4,50,000) 3,00,000 By Surplus transferred to Liquidator 16,50,000
31,75,000 31,75,000

Liquidator’s Statement of Account

Particulars Amount Particulars Amount
To Surplus received from Receiver 16,50,000 By Liquidation expenses 17,500
To Assets Realized 12,50,000 By Liquidators remuneration 25,000
(12,50,000 x 2%)
By Unsecured Creditors
Directors for Bank OD 2,75,000
Trade Creditors 7,30,000 10,05,000
By Preference Shareholders
Capital 10,00,000
(+) Pref. D/d 2,40,000 12,40,000
(10,00,000 x 12% x 2)
By Equityshareholders
1,00,000 shares @ 4.75 4,75,000
50,000 shares @ 2.75 1,37,500 6,12,500
29,00,000 29,00,000
Working Note:
Surplus before payment to Preference shareholders 18,52,500
Less: Payment to Preference shareholders (12,40,000)
Surplus after payment to Preference shareholders 6,12,500
(+) Notional call (50,000 shares x 2) 1,00,000
7,12,500
No. of Shares (50,000 + 1,00,000) 1,50,000
Refund per share 4.75

50,000 1,00,000
Call 2 -
Refund (4.75) (4.75)
2.75 Refund 4.75 Refund

The copyright of these notes is with C.A. Nitin Goel

No part of these notes may be reproduced in any manner without his prior permission in writing.