Surplus remaining after repaying the equity share capital

Reference no: EM13181641

The Sundry Vally Mining Co. Ltd. went into voluntary liquidation on 1 April 2011, as its mines reached such a state of depletion that it became too costly to excavate further minerals. The liquidator, whose remuneration is 3% on realization of assets and 2% on distribution among the shareholders, realized all the assets. The following was the position of the company on 31 March 2011:

	Rs.
Cash on Realization of Assets	15,00,000
Expenses of Liquidation	27,000
Unsecured Creditors (Including Salaries and Wages for One Month Prior to Liquidation Rs.18,000)	2,04,000
4,500 14% Preference Shares of	4,50,000
Rs.100 Each Dividend Paid Up To 31 March 2010
30,000 Equity Shares of Rs.10 Each,	2,70,000
Rs.9 per Share Called and Paid-Up
General Reserve as on 31 March 2011	3,60,000
Profit & Loss A/c as on 31 March 2011	60,000

Under the Articles of Association of the Company, the preference shareholders have the right to receive one-third of the surplus remaining after repaying the equity share capital.

Reference no: EM13181641

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