Question 5 10 marks Brian Ltd went into liquidation on 1 July 2019. The directors presented the following statement of financial position to the liquidator: $ 5,311,500 7,500,000 12,811,500 Brian Ltd Statement of Financial Position as at 30 June 2019 Assets $ $ Current assets Account receivable 4,810,000 Inventory 501,500 Non-current assets Land and buildings 5,120,000 Furniture and fittings 2,800,000 Accumulated depreciation (420,000) 2,380,000 Total assets Liabilities current liabilities Accrued expenses 76,200 Overdraft 57,000 Trade creditors 190,000 Non-current liabilities Debentures 700,000 Total liabilities Net assets Shareholders' equity 450,000 preference shares of $1 each fully paid 10,000,000 'A' ordinary $1 shares paid to $0.75 Calls in arrears (50,000 at $0.25) (12,500) 1,000,000 'B' ordinary $2 shares paid to $1 each Revaluation surplus 4,450,000 Accumulated losses (1,599,200) Total shareholders' equity 323,200 1,023,200 11,788,300 450,000 7,500,000 7,487,500 1,000,000 11,788,300 Additional Information (a) Proceeds from the sale of assets achieved and collections made by the liquidator are as follows: $ Accounts receivable 2,600,000 Inventory 520,000 Land and buildings 4,000,000 Furniture and fittings 1,300,000 Calls in arrears 11,500 (b) The liquidator conducted a review of the Statement of Financial Position submitted by the directors and performed a review of proof of debts. The liquidator has identified and accepted additional liabilities and changes to some of the other liabilities as follows: S Interest on overdraft 1,500 Trade creditors 170,000 Accrued expenses 85,000 Interest on debentures 140,000 There was no change made to the overdraft balance or the debenture face value due to debenture holders. The overdraft and related interest is secured against the accounts receivable balance whilst the debentures and related interest are secured against the land and buildings. There were no employee entitlements outstanding at the date of liquidation. (c) Liquidator's expenses and fees amounted to $450,000. (d) Upon review of the constitution of Brian Ltd, the liquidator has identified that preference shares have preference as to dividends and repayment of capital. All 'A' and 'B' class ordinary shares rank equally Requirements (1) Prepare the receipts and payments account, liquidation account and members' distribution account in columnar format. (2) Complete the member's distribution schedule identifying how each class of share may share in any cash available after settlement of all creditors. If a call is required to be made against shareholders you are to assume this will be collected, in full, by the liquidator. Correct payment order in the liquidation account will be awarded marks. Round all numbers to whole numbers. Question 5 10 marks Brian Ltd went into liquidation on 1 July 2019. The directors presented the following statement of financial position to the liquidator: $ 5,311,500 7,500,000 12,811,500 Brian Ltd Statement of Financial Position as at 30 June 2019 Assets $ $ Current assets Account receivable 4,810,000 Inventory 501,500 Non-current assets Land and buildings 5,120,000 Furniture and fittings 2,800,000 Accumulated depreciation (420,000) 2,380,000 Total assets Liabilities current liabilities Accrued expenses 76,200 Overdraft 57,000 Trade creditors 190,000 Non-current liabilities Debentures 700,000 Total liabilities Net assets Shareholders' equity 450,000 preference shares of $1 each fully paid 10,000,000 'A' ordinary $1 shares paid to $0.75 Calls in arrears (50,000 at $0.25) (12,500) 1,000,000 'B' ordinary $2 shares paid to $1 each Revaluation surplus 4,450,000 Accumulated losses (1,599,200) Total shareholders' equity 323,200 1,023,200 11,788,300 450,000 7,500,000 7,487,500 1,000,000 11,788,300 Additional Information (a) Proceeds from the sale of assets achieved and collections made by the liquidator are as follows: $ Accounts receivable 2,600,000 Inventory 520,000 Land and buildings 4,000,000 Furniture and fittings 1,300,000 Calls in arrears 11,500 (b) The liquidator conducted a review of the Statement of Financial Position submitted by the directors and performed a review of proof of debts. The liquidator has identified and accepted additional liabilities and changes to some of the other liabilities as follows: S Interest on overdraft 1,500 Trade creditors 170,000 Accrued expenses 85,000 Interest on debentures 140,000 There was no change made to the overdraft balance or the debenture face value due to debenture holders. The overdraft and related interest is secured against the accounts receivable balance whilst the debentures and related interest are secured against the land and buildings. There were no employee entitlements outstanding at the date of liquidation. (c) Liquidator's expenses and fees amounted to $450,000. (d) Upon review of the constitution of Brian Ltd, the liquidator has identified that preference shares have preference as to dividends and repayment of capital. All 'A' and 'B' class ordinary shares rank equally Requirements (1) Prepare the receipts and payments account, liquidation account and members' distribution account in columnar format. (2) Complete the member's distribution schedule identifying how each class of share may share in any cash available after settlement of all creditors. If a call is required to be made against shareholders you are to assume this will be collected, in full, by the liquidator. Correct payment order in the liquidation account will be awarded marks. Round all numbers to whole numbers