Exam 16: Insolvency and Liquidation

In relation to the order of priority of payment of debts upon liquidation, which statement is correct?

The details below were extracted from the accounting records of Great South East Ltd (a company in the process of liquidation). \ 40000\ 1 preference shares fully paid 40000 120000\ 1 ordinary shares paid to 50 cents Cash available (after payment of all creditors) 10000 Assume that the constitution of Great South East Ltd states that in the event of liquidation, all shares are to rank equally, based on the number of shares held, in distributing any surplus or deficiency. For ordinary shareholders, what is the amount of the actual refund or call?

The liquidator is required to lodge a preliminary report with ASIC within 14 days of their appointment setting out details of capital issued, estimated assets and liabilities and causes of the company's failure.

A voluntary winding up may be put in place by either:

Under a creditor's voluntary winding up, the company must provide each creditor with a copy of the statement of affairs.

The details below were extracted from the accounting records of Great South East Ltd (a company in the process of liquidation). \ 40000\ 1 preference shares fully paid 40000 120000\ 1 ordinary shares paid to 50 cents Cash available (after payment of all creditors) 10000 Assume that the constitution of Great South East Ltd states that in the event of liquidation, all shares are to rank equally, based on the number of shares held, in distributing any surplus or deficiency. What will be the deficiency or surplus apportioned to ordinary shareholders?

Who is required to prepare the report as to affairs (Form 507)?

Which of the following is not a general ground under s. 461 of the Corporations Act on which the court can order a winding up?

Voluntary winding up can only take place where a company is solvent.

Under a members' voluntary winding up, the directors of the company are required to prepare which of the following documents? I. Statement of affairs II) Summary of affairs III) Preliminary liquidation report IV) Declaration of solvency

The details below were extracted from the accounting records of Great South East Ltd (a company in the process of liquidation). \ 40000\ 1 preference shares fully paid 40000 120000\ 1 ordinary shares paid to 50 cents Cash available (after payment of all creditors) 10000 Assume that the constitution of Great South East Ltd states that in the event of liquidation, all shares are to rank equally, based on the number of shares held, in distributing any surplus or deficiency. What will be the deficiency or surplus apportioned to preference shareholders?

The existence of accumulated losses at the commencement of a winding up will:

Which of the following statements is incorrect?

What is the timeframe within which the liquidator must submit a preliminary report to ASIC after receiving the statement of affairs from the directors?

The shareholders of a company are liable for prosecution under the Corporations Act 2001 if they allow the company to trade while it is insolvent.

At the commencement of a members' voluntary winding up, a written declaration must be provided by directors stating that all debts will be able to be paid in full within a period:

Ordinary unsecured creditors have no preferential treatment and are the last to be paid before funds are returned to contributories.

The basis for a voluntary winding up of a company is:

The journal entry to record the distribution of cash to shareholders includes which of the following?

The main purpose of the liquidation account is to: