A Close Corporation may convert to a limited liability company, provided that all members agree to...

 

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A Close Corporation may convert to a limited liability company, provided that all members agree to the conversion and become members of the company. Assume that a CC has the following balance sheet at the date of conversion. ASSETS NON-CURRENT ASSETS 65 000 Current Assets Inventory 15 000 Debtors 16 000 35 000 100 000 Cash 4 000 EQUITY AND LIABILITIES Members' funds: Members' contributions 80 000 Undrawn income 10 000 90 000 Current liabilities Creditors 10 000 100 000 You are required to: 1.1 Value the assets of the CC on a realisation basis, and 1.2 Prepare the opening balance sheet of the Limited Company. A Close Corporation may convert to a limited liability company, provided that all members agree to the conversion and become members of the company. Assume that a CC has the following balance sheet at the date of conversion. ASSETS NON-CURRENT ASSETS 65 000 Current Assets Inventory 15 000 Debtors 16 000 35 000 100 000 Cash 4 000 EQUITY AND LIABILITIES Members' funds: Members' contributions 80 000 Undrawn income 10 000 90 000 Current liabilities Creditors 10 000 100 000 You are required to: 1.1 Value the assets of the CC on a realisation basis, and 1.2 Prepare the opening balance sheet of the Limited Company.

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1 Value of assets on Realisation basis Noncurrent assets 65000 Current assets Inventory 15000 De... View the full answer