Accounting

AF 203 CORPORATE ACCOUNTING
Workshop 7

Question 1

Stricken Ltd went into liquidation on 1 April 20X6 and presents the following trial balance.

Stricken Ltd
Trial Balance as at 1 April 20X6
$ $
Accounts receivable           75 000
Inventory             196 000
Motor vehicles               16 000
Plant and equipment               92 000
Land and buildings               80 000
Preliminary expenses                 3 000
Accumulated losses (debit)                             200 000
Bank       58 000
Trade creditors               69 000
Accrued expenses       2 000
Unsecured notes             100 000
Share capital ($1 shares)
  - Preference (fully paid)             150 000
  - Ordinary (fully paid)             250 000
Accumulated depreciation – motor vehicles       5 000
            - plant/equipment       ______                   28 000
    $662 000             $662 000
    ======               ======
Additional information:
(i) Proceeds from sale of assets:
Accounts receivable                     $74 000
Inventory                 160 000
Motor vehicles                     9 000
          Plant & equipment                   52 000
Land & buildings                   100 000

(ii) Payments:
  Interest on overdraft                       $900
    Trade creditors                   67 800
  Accrued expenses                     2 500
  Unsecured notes & interest thereon         102 200
  Liquidator’s expenses & remuneration       5 500

(iii) Rights of shareholders: Preference shareholders were preferential as to return of capital.

Required
Prepare the Cash account, the Liquidation account and the Shareholders’ Distribution account.

Question 2

On 1 July 20X6, Downer Ltd went into voluntary liquidation and its assets and liabilities at that date were:
$
20 000 6% preference...