Final distribution of a deficiency

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Reference no: EM13861471

Fly Ltd went into liquidation on 30th June 2014.

The company had the following Equity

Share Capital:

 

40,000 preference shares, issued at $2 and paid to $1

 

$40,000

68,000 "A" ordinary shares, issued for $2, called to $1.50

 

102,000

50,000 "B" ordinary shares, issued for $1, called to 75c

 

  37,500

 

 

179,500

Less:    Calls in arrears:

12,000 "A" ordinary shares

 

$ (3,000)

 

1,200 "B" ordinary shares

    (300)

  (3,300)

 

 

176,200

Calls in advance: 2000 "A" ordinary shares at 50c

 

1,000

General reserve

 

25,800

Retained earnings (losses)

 

(13,000)

Total equity

Additional information:

 

$190,000

i. The company's constitution was silent as to return of capital in the event of a winding up.

ii. All calls in arrears were received by the liquidator, except from 2,000 "A" Ordinary shares which were forfeited.

iii. Calls in advance were not paid back before the final distribution by the liquidator. Uncalled capital (where required to be called up) on final distribution proved to be recoverable.

iv. After the realisation of the assets, the payments of liabilities and liquidators costs and the receipts and forfeiture in ii) above there remained a cash balance of $100.

REQUIRED

Show all workings for the calculation of the final distribution of a deficiency or surplus to the shareholders.

Reference no: EM13861471

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