Question for Insolvency

Larry Ltd went into voluntary liquidation on 30 June 2021. Its summarised statement of financial position at that date is as follows:

All assets realised amounted to $50 000. Payables allowed a $500 discount. Costs of liquidation were $4 000.

Required

1. Complete the journal entries to liquidation. The narrations for the journal entries have been provided to you as additional guidance.

Journal for your answer to question 1. Expand the table as needed to contain your answer.

Date	Account	Dr	Cr
30 June 2021	(Transfer cash)
	(Transfer of carrying amounts)
	(Realisation of assets)
	(Record expenses of liquidation)
	(Record payment of payables & discount)
	(Close of shareholders account)
	(Distribution of final funds to shareholders)
	(Close out liquidation profit)

2. Record the entries in the Liquidation account, the Liquidators receipts & payments, and the Shareholders distribution account.

Liquidators Receipts & Payments

Liquidation

Shareholders Distribution

Larry Ltd Statement of Financial Position Current assets Equity Share capitale 000 10 2021 As at 30 June JCashr-000 43 - 2 000 12 000 Inventory Non-current assets Lande Total assets 39 000 51 000 || Current liabilities Payables 8 0002 | Total equity Net assetsq_000 43 43 0002