In accounting why liquidating is declaired
The Redundancy Payment Office would rank as a creditor of the company and would be refunded when distributions were made to creditors'.
This concession allowed the striking off procedure to be used and distributions to shareholders is treated as a capital distribution.This is usually something your accountant would be involved with and may have tax advantages.HMR&C with effect from 1st March 2012 have withdrawn this concession where assets of a company exceed £25,000. An MVL should normally last for no longer than one year.During this time, without a formal Liquidation your creditors' are likely to take action against the company.To appoint us to deal with such matters ensures that you are discharging your responsibilities as directors properly.A Members’ Voluntary Liquidationprocess where the net distributable assets exceed £25,000 would have the effect of making any distributions to shareholders capital rather than income. What happens if the assets do not realise as much as we originally thought and the creditors' cannot be fully paid?
This may happen, for example, if a major debtor went bust which could have a significant bearing on the solvency of the company.
The company would make the following journal entries to record realized gain and loss: Realized loss on sale of trading securities and Realized gain on sale of available-for-sale securities represent income statement accounts (i.e., gain or loss is recorded in the income statement).
These book gains or losses are reported in the Other revenues and expenses section of the income statement.
On December 15, 20X2 Busy Company would make the following journal entry to record declaration of the cash dividend: When trading and available-for-sale securities are sold, the company might recognize either a gain or loss on the sale.
The realized gain or loss is determined as the difference between the proceeds from the sale and the book value (i.e., see balance sheet) of the securities.
Assume that the incidental costs were deducted from the sale price.