Preferential debts-distribution of assets-liquidation, Financial Accounting

Preferential debts

These are almost the same as in bankruptcy; with the addition that any person who has advanced money for the payment of wages has the same priority as the person receiving payment out of the advance would otherwise have had s.311. The "relevant date" for calculating these debts is the date of the resolution to wind up, or the date of the winding-up order or of the appointment of a provisional liquidator. There are no pre-preferential debts in liquidation, and the only deferred debt is interest in excess of 6 per cent per annum.

The preferential debts in bankruptcy include the following:

  1. Local rates and amounts deducted as P.A.Y.E. from employees' pay accruing due during the twelve month preceding the commencement of the winding up;
  2. Up to one year's arrears of any other assessed taxes;
  3. Wages and salary due to employees (but not directors) for work done during the four months preceding the winding-up up to Shs 4,000 per employee;
  4. All government rents not more than one year in arrears;
  5. Employer’s National Social Security Fund due during the previous twelve months;
  6. Any amounts, which have accrued before the winding up due to employees is respect of any compensation under the Workmen's Compensation Act.
Posted Date: 12/13/2012 2:56:07 AM | Location : United States







Related Discussions:- Preferential debts-distribution of assets-liquidation, Assignment Help, Ask Question on Preferential debts-distribution of assets-liquidation, Get Answer, Expert's Help, Preferential debts-distribution of assets-liquidation Discussions

Write discussion on Preferential debts-distribution of assets-liquidation
Your posts are moderated
Related Questions

Creation An express trust is "created not by facts and circumstances, but by the express words of the settlor". (Fitzgerald v Stewart) It may be created in the following ways:


Types of temporary differences There are two main types of temporary differences; 1) Taxable temporary difference : If the carrying amount is more than the tax base then

Investment with ex. div. quotation Investment with ex. div. quotation will be debited to the investment account at its ex. div. value. The full impending dividend will also

CONSOLIDATED INCOME STATEMENT AND CONSOLIDATED STATEMENT OF CHANGES IN EQUITY     The consolidated income statement follows similar principles as those of the consolidated balanc

Value of accounting information When assessing value of accounting information we are confronted with similar problems. Provision of accounting information can be very expensiv

Equation illustrates the relationship in between PVA n , A, K and n. So manipulating this a bit: We find that A = PVA n [(k (1 + k) n )/((1 +k) n - 1)] [(k (1 + k) n )/(

Function to return the phase of a complex number 1. What is Annuity kind of cash flow? 2. What do understand by Portfolio risk? 3. What do you understand by 'Loan Am

Let us assume you expect to obtain Rs.2000 yearly for the next three years. The receipt of Rs.2000 is evenly divided. One part that is: Rs.1000 is obtained at the beginning of the