Required: Show all workings.

(A) Prepare the Liquidation account (in T format) for Butterfly Ltd as at 23 May 2021

(B) The Liquidators Cash account (in T format) for Butterfly Ltd as at 23 May 2021

(C) The Shareholders Distribution account (in T format) for Butterfly Ltd as at 23 May 2021

(D) Determine the gain or loss on liquidation accordingly

Butterfly Ltd, a company based in Australia, went into liquidation under a court order on 23 May 2021. The Statement of Financial Position of Butterfly Ltd is presented below. Butterfly Ltd Statement of Financial Position As at 23 May 2021 $ $ Assets 20 000 61 000 Freehold property Plant and machinery Less: Accumulated depreciation - plant and machinery Goodwill (22 000) 39 000 5 000 Trade and other receivables 31 800 Inventories 18 200 114 000 Liabilities 35 000 10 000 2 150 Accounts payable Current tax payable Accrued liabilities Bank overdraft (secured by non-circulating interest on freehold property) 15% debentures (secured by circulating interest) 8 000 12 000 67 150 Net assets 46 850 14 000 Equity 14 000 10% preference shares fully paid at $1 20 000 'A' ordinary shares paid to $1.55 (issued for $2) 10 000 'B' ordinary shares issued for $1 (called to $0.75) Less: Calls in arrears 2 000 shares at $0.25 31 000 7 500 (500) 7 000 52 000 Retained earnings (5 150) 46 850 Additional information: (a) The liquidator was able to receive the following amounts for assets: Plant and machinery $ 8 000 Goodwill $ Trade and other receivables $ 22000 Inventories $ 17 000 (b) The freehold property was sold by the bank from which Butterfly Ltd secured the bank overdraft for $30 000 and, after settlement of local government rates, and the bank overdraft, the remainder was transferred to the liquidator. (c) Accounts payable were prepared to settle their claims at a discounted amount of $11 950. (d) The item 'Accrued liabilities' in the financial statements of Butterfly Ltd included: Local government rates payable $ 500 Directors' fees payable $ 400 GST payable $ 250 Rent payable 150 Accrued utilities payable 250 Wages payable 250 Other payables $ 350 2 150 A A A EA EA EA U (e) Unrecorded liabilities included arrears of preference dividends of $1 500, liquidation expenses, $700, and liquidation fee of $1200. The constitution of the company states that arrears of dividends are to be paid in the event of liquidation. All shares are to rank equally, based on the number of shares held in distributing any surplus or deficiency. (f) The liquidator forfeited all 'B' ordinary shares on which calls were unpaid. (9) After meeting all liabilities and expenses, the liquidator will distribute the remaining balance to shareholders on 30 August 2021. Required: Show all workings. Prepare the Liquidation account, the Liquidator's Cash account and the Shareholders' Distribution account (in T-format) for Butterfly Ltd as at 23 May 2021. Determine the gain or loss on liquidation accordingly. (Question 3 = 12 marks) Butterfly Ltd, a company based in Australia, went into liquidation under a court order on 23 May 2021. The Statement of Financial Position of Butterfly Ltd is presented below. Butterfly Ltd Statement of Financial Position As at 23 May 2021 $ $ Assets 20 000 61 000 Freehold property Plant and machinery Less: Accumulated depreciation - plant and machinery Goodwill (22 000) 39 000 5 000 Trade and other receivables 31 800 Inventories 18 200 114 000 Liabilities 35 000 10 000 2 150 Accounts payable Current tax payable Accrued liabilities Bank overdraft (secured by non-circulating interest on freehold property) 15% debentures (secured by circulating interest) 8 000 12 000 67 150 Net assets 46 850 14 000 Equity 14 000 10% preference shares fully paid at $1 20 000 'A' ordinary shares paid to $1.55 (issued for $2) 10 000 'B' ordinary shares issued for $1 (called to $0.75) Less: Calls in arrears 2 000 shares at $0.25 31 000 7 500 (500) 7 000 52 000 Retained earnings (5 150) 46 850 Additional information: (a) The liquidator was able to receive the following amounts for assets: Plant and machinery $ 8 000 Goodwill $ Trade and other receivables $ 22000 Inventories $ 17 000 (b) The freehold property was sold by the bank from which Butterfly Ltd secured the bank overdraft for $30 000 and, after settlement of local government rates, and the bank overdraft, the remainder was transferred to the liquidator. (c) Accounts payable were prepared to settle their claims at a discounted amount of $11 950. (d) The item 'Accrued liabilities' in the financial statements of Butterfly Ltd included: Local government rates payable $ 500 Directors' fees payable $ 400 GST payable $ 250 Rent payable 150 Accrued utilities payable 250 Wages payable 250 Other payables $ 350 2 150 A A A EA EA EA U (e) Unrecorded liabilities included arrears of preference dividends of $1 500, liquidation expenses, $700, and liquidation fee of $1200. The constitution of the company states that arrears of dividends are to be paid in the event of liquidation. All shares are to rank equally, based on the number of shares held in distributing any surplus or deficiency. (f) The liquidator forfeited all 'B' ordinary shares on which calls were unpaid. (9) After meeting all liabilities and expenses, the liquidator will distribute the remaining balance to shareholders on 30 August 2021. Required: Show all workings. Prepare the Liquidation account, the Liquidator's Cash account and the Shareholders' Distribution account (in T-format) for Butterfly Ltd as at 23 May 2021. Determine the gain or loss on liquidation accordingly. (Question 3 = 12 marks)