Liquidation- Alternative solution

This pertains to Question 3 (Full Stop Limited) in the ICAI book's book back exercises. In the working note they have found the final settlement differently. I have used a different approach and found a differing answer. Can you please check if this is fine and if not, why it is wrong?

Answers (4)

Best Answer

It doesnt work that way. Capital is not returned on the basis of proportion of paid up. Think of it this way. The ones who paid 50 have to pay 50 to company. and the ones who paid 60 have to pay 40 to the company. Once this amount is collected, total amount available with company would be 51,000 + 2,50,000 + 2,00,000 = 501,000. Each shareholder will now get 50.1 So net settlement will be 50.1-50 and 50.1-40.

Where did you get that 5.5 from?

I reduced Residual Figure by Capital Employed (51000/550000) to 0.51: 5.5 sir