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-   -   Liquidation of a Company (https://www.askmehelpdesk.com/showthread.php?t=184442)

  • Feb 15, 2008, 03:18 PM
    Norma1218
    Liquidation of a Company
    I have two companies and am trying to close out one of them. They are related one to the other, but they are in two different states. I have almost all the accounts zeroed out but need to transfer the Inter company Accounts, and then recognize the gain on Liquidation of the company. I understand the journal entry that I need to make is as follows:
    Dr. Inter company Acct
    Cr. Gain on Liquidation of Co.

    And the J/E in the company that I am keeping is a follows:
    Dr. Loss on Liquidation of Co
    Cr. Inter company accounts

    I don't know exactly what account is affected in the Gain on Liquidation of the Company. It is in the P&L, but what account is that. Is that a Gain/Loss on Sale or Transfer of Assets? I am not really transferring assets. Is money that one company had borrowed from the other.

    Please help!
    Thank you.
  • Feb 20, 2008, 02:01 PM
    MaggieMouse
    Depends on how these two companies are related. Is one a subsidiary of the other? Why do you need to move the accounts?

    If you have a gain on one, I think you should have the gain, not a loss, no matter how you move them.
  • Mar 3, 2008, 06:10 PM
    sykhai
    How do you liquidate for 3 partners with ratio of 1:5:4 ratio with loss of 29,000?
  • Mar 5, 2008, 09:39 AM
    MaggieMouse
    Just use the 3 percentages times the loss amount. $2900, $14500, and $11600.
  • Nov 18, 2010, 07:54 AM
    IQlady
    Move the Gain or Loss on liquidation to Shareholder Distribution account
  • Feb 24, 2011, 11:26 PM
    israelkaguo
    Computation of liquidator remunaration

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