Professional Documents
Culture Documents
as going concern
put into liquidation
670 000
670 000
330 000
280 000
142 000
128 000
57 600
42 500
60 000
52 000
15 000
15 000
1 274 600
1 187 500
1 274 600
(700 000)
(120 000)
(120 000)
(800 000) * (800-466)/800 = 41.75%
(466 000)
if the company is liquidated, the asset are not sufficient to pay off the shareholder.
the preference shareholder may expected to agree on reconstruction scheme.
Since asset on liquidation only cover 41.75% of total claim.
a capital reconstruction scheme is more for the benefit of all the parties.
800 = 41.75%
(2 075 000)
(96 000)
590 000
(30 000)
(126 000)
(14 400)
(30 000)
(15 000)
(21 800)
(200 000)
(170 000)
(2 188 200)
c) reduction in claimed
p/s dividendn in arrears
bank overdraft
secured creditor
debenture
unsecured creditor
PSH
OSH
share premium
total losses
capital reserve
amount
96 000
480 000
120 000
700 000
120 000
800 000
1 500 000
40 000
reduction%
100%
100%
58%
98%
100%
2 075 000)
2 188 200)
amount
96 000
120 000
464 000
1 470 000
40 000
2 190 000
2 188 200
1 800
1 500 000
330 000
142 000
57 600
60 000
30 000 o/s
171 800
o/s of RM1 (30 + 21.8 + 120)
336 000
9% p/s of RM1
capital reserve
CURRENT LIABILITIES
debenture interest
secured creditor
bank overdraft
reconstruction cost
accrued expense
NON CURRENT LIABILITIES
debenture
long term loan
CURRENT ASSET
inventories
account receivable
cash in hand (15 + 21.8 + 120)
NON CURRENT ASSET
land and building
plant and machinery
other tangible asset
171 800
336 000
1 800
40 000
120 000
480 000
21 800
25 000
700 000
350 000
2 246 400
60 000
57 600
1 500 000
330 000
142 000
2 246 400
e) gearing ratio
capital employed
before
after
OSC
PSC
profit and loss (debit)
capital reserve
share premium
10 % debenture
Long term loan
capital employed
1 500 000
800 000
(2 075 000)
171 800
336 000
40 000
700 000
350 000
1 315 000
700 000
350 000
1 559 600
Gearing ratio
1 150 000
1 315 000
0.87
686 000
1 559 600
0.44
1 800
as a result of the reconstruction scheme, the level of gearing of the company has
significantly decrease from 87% to 44%. The company has now become less risky
compare before the time of reconstruction. However, the company should improve its
performance in the future in order to reward their shareholders who may made a large
sacrifice for the survival of the company.
de a large