Surplus remaining after repaying the equity share capital

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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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