Criteria to check insolvency
This query is : Resolved
Gaurav Srivastava
(Querist)
16 November 2015
Good evening everyone
I would like to ask that whether we will take the current assets and current liabilities for checking the solvency status of the company or will take the total assets and total liabilities and equity for checking the insolvency status.
Thanks in advance
I would like to ask that whether we will take the current assets and current liabilities for checking the solvency status of the company or will take the total assets and total liabilities and equity for checking the insolvency status.
Thanks in advance
Amol S Joglekar
(Expert)
16 November 2015
total assets and total liabilities shall be considered.
Gaurav Srivastava
(Querist)
16 November 2015
ASSETS
Current Assets:
Cash at Hand 0.00
Cash at Bank 22,821.44
Accounts Receivable 0.00
Less: Reserve for Bad Debts 0.00
Stock 7,795.28
Prepaid Expenses 0.00
Notes Receivable 0.00
Total Current Assets 30,616.72
Fixed Assets:
Computers 4032.33
Less:Accumulated Depreciation -2419.40
Furniture and Fixtures 0.00
Less:Accumulated Depreciation 0.00
Equipment 0.00
Less:Accumulated Depreciation 0.00
Buildings 0.00
Less:Accumulated Depreciation 0.00
Land 1,00,000.00
Total Fixed Assets 1,01,612.93
Other Assets:
Goodwill 0.00
Total Other Assets 0.00
Total Assets 1,32,229.65
LIABILITIES & EQUITY
Current Liabilities:
Accounts Payable 0.00
Sales Taxes Payable 0.00
Payroll Taxes Payable 0.00
Income Taxes Payable 0.00
Accrued Wages Payable 0.00
Unearned Revenues 0.00
Bank Overdraft 0.00
Shareholders' loans 53,433.75
Total Current Liabilities 53,433.75
Long-Term Liabilities:
Long-term Bank Loans Payable 0.00
Mortgage Payable 0.00
Total Long-Term Liabilities 0.00
Total Liabilities 53,433.75
Capital & Reserves
Capital 1,000,00.00
Add: Net Profit -21,204.10
Less: Drawings 0.00
Net Capital 787,95.90
Total Liabilities and Equity 1,32,229.65
Please consider the above Balance Sheet and advice me whether the company is solvent or insolvent??
Thanks
Current Assets:
Cash at Hand 0.00
Cash at Bank 22,821.44
Accounts Receivable 0.00
Less: Reserve for Bad Debts 0.00
Stock 7,795.28
Prepaid Expenses 0.00
Notes Receivable 0.00
Total Current Assets 30,616.72
Fixed Assets:
Computers 4032.33
Less:Accumulated Depreciation -2419.40
Furniture and Fixtures 0.00
Less:Accumulated Depreciation 0.00
Equipment 0.00
Less:Accumulated Depreciation 0.00
Buildings 0.00
Less:Accumulated Depreciation 0.00
Land 1,00,000.00
Total Fixed Assets 1,01,612.93
Other Assets:
Goodwill 0.00
Total Other Assets 0.00
Total Assets 1,32,229.65
LIABILITIES & EQUITY
Current Liabilities:
Accounts Payable 0.00
Sales Taxes Payable 0.00
Payroll Taxes Payable 0.00
Income Taxes Payable 0.00
Accrued Wages Payable 0.00
Unearned Revenues 0.00
Bank Overdraft 0.00
Shareholders' loans 53,433.75
Total Current Liabilities 53,433.75
Long-Term Liabilities:
Long-term Bank Loans Payable 0.00
Mortgage Payable 0.00
Total Long-Term Liabilities 0.00
Total Liabilities 53,433.75
Capital & Reserves
Capital 1,000,00.00
Add: Net Profit -21,204.10
Less: Drawings 0.00
Net Capital 787,95.90
Total Liabilities and Equity 1,32,229.65
Please consider the above Balance Sheet and advice me whether the company is solvent or insolvent??
Thanks
Gaurav Srivastava
(Querist)
16 November 2015
ASSETS
Current Assets:
Cash at Hand 0.00
Cash at Bank 22,821.44
Accounts Receivable 0.00
Less: Reserve for Bad Debts 0.00
Stock 7,795.28
Prepaid Expenses 0.00
Notes Receivable 0.00
Total Current Assets 30,616.72
Fixed Assets:
Computers 4032.33
Less:Accumulated Depreciation -2419.40
Furniture and Fixtures 0.00
Less:Accumulated Depreciation 0.00
Equipment 0.00
Less:Accumulated Depreciation 0.00
Buildings 0.00
Less:Accumulated Depreciation 0.00
Land 1,00,000.00
Total Fixed Assets 1,01,612.93
Other Assets:
Goodwill 0.00
Total Other Assets 0.00
Total Assets 1,32,229.65
LIABILITIES & EQUITY
Current Liabilities:
Accounts Payable 0.00
Sales Taxes Payable 0.00
Payroll Taxes Payable 0.00
Income Taxes Payable 0.00
Accrued Wages Payable 0.00
Unearned Revenues 0.00
Bank Overdraft 0.00
Shareholders' loans 53,433.75
Total Current Liabilities 53,433.75
Long-Term Liabilities:
Long-term Bank Loans Payable 0.00
Mortgage Payable 0.00
Total Long-Term Liabilities 0.00
Total Liabilities 53,433.75
Capital & Reserves
Capital 1,000,00.00
Add: Net Profit -21,204.10
Less: Drawings 0.00
Net Capital 787,95.90
Total Liabilities and Equity 1,32,229.65
Please consider the above Balance Sheet and advice me whether the company is solvent or insolvent??
Thanks
Current Assets:
Cash at Hand 0.00
Cash at Bank 22,821.44
Accounts Receivable 0.00
Less: Reserve for Bad Debts 0.00
Stock 7,795.28
Prepaid Expenses 0.00
Notes Receivable 0.00
Total Current Assets 30,616.72
Fixed Assets:
Computers 4032.33
Less:Accumulated Depreciation -2419.40
Furniture and Fixtures 0.00
Less:Accumulated Depreciation 0.00
Equipment 0.00
Less:Accumulated Depreciation 0.00
Buildings 0.00
Less:Accumulated Depreciation 0.00
Land 1,00,000.00
Total Fixed Assets 1,01,612.93
Other Assets:
Goodwill 0.00
Total Other Assets 0.00
Total Assets 1,32,229.65
LIABILITIES & EQUITY
Current Liabilities:
Accounts Payable 0.00
Sales Taxes Payable 0.00
Payroll Taxes Payable 0.00
Income Taxes Payable 0.00
Accrued Wages Payable 0.00
Unearned Revenues 0.00
Bank Overdraft 0.00
Shareholders' loans 53,433.75
Total Current Liabilities 53,433.75
Long-Term Liabilities:
Long-term Bank Loans Payable 0.00
Mortgage Payable 0.00
Total Long-Term Liabilities 0.00
Total Liabilities 53,433.75
Capital & Reserves
Capital 1,000,00.00
Add: Net Profit -21,204.10
Less: Drawings 0.00
Net Capital 787,95.90
Total Liabilities and Equity 1,32,229.65
Please consider the above Balance Sheet and advice me whether the company is solvent or insolvent??
Thanks
Amol S Joglekar
(Expert)
18 November 2015
what is the market value of LAND?
Gaurav Srivastava
(Querist)
18 November 2015
It is same i.e Rs. 100,000
Amol S Joglekar
(Expert)
18 November 2015
Well! That was an indirect query question.
Anyway, doesn't matter. Let the book value be equal to market value. You are genious to have such a coompany for your solvency consideration.
The company is solvent to the extent of share capital i.e. 78,795.90
Anyway, doesn't matter. Let the book value be equal to market value. You are genious to have such a coompany for your solvency consideration.
The company is solvent to the extent of share capital i.e. 78,795.90
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