Unsecured creditors of a Company are Rs. 300000 and the amount available with liquidator after payment to secured creditors but before considering liquidator’s remuneration is Rs.... Unsecured creditors of a Company are Rs. 300000 and the amount available with liquidator after payment to secured creditors but before considering liquidator’s remuneration is Rs. 153000. If liquidator’s remuneration is 2% of net amount paid to unsecured creditors, what will be the amount payable by liquidator to unsecured creditors in this case?
Understand the Problem
The question is asking to calculate the amount payable by the liquidator to unsecured creditors after considering the liquidator's remuneration and the total available amount. The liquidator's remuneration is a percentage of the net amount paid to unsecured creditors.
Answer
The amount payable by the liquidator to unsecured creditors is approximately Rs. 153000.
Answer for screen readers
The amount payable by the liquidator to unsecured creditors is approximately Rs. 153000.
Steps to Solve
- Define Variables
Let ( x ) be the net amount paid to unsecured creditors. The liquidator's remuneration is 2% of this amount.
- Set Up the Equation
The total amount available with the liquidator after paying secured creditors is Rs. 153000. The remuneration is given by ( 0.02x ).
The equation representing the relationship is: $$ x - 0.02x = 153000 $$
- Simplify the Equation
Combine like terms: $$ 0.98x = 153000 $$
- Solve for ( x )
To find ( x ), divide both sides by 0.98: $$ x = \frac{153000}{0.98} $$
Calculating this gives you: $$ x \approx 156122.45 $$
- Calculate Liquidator’s Remuneration
Now, calculate the liquidator's remuneration: $$ \text{Remuneration} = 0.02x \approx 0.02 \times 156122.45 \approx 3122.45 $$
- Determine the Amount Payable to Unsecured Creditors
Finally, the amount payable by the liquidator to unsecured creditors is: $$ \text{Amount payable} = x - \text{Remuneration} \approx 156122.45 - 3122.45 \approx 153000 $$
The amount payable by the liquidator to unsecured creditors is approximately Rs. 153000.
More Information
This problem illustrates how to account for a liquidator's remuneration when calculating final amounts available for creditors. It's also a practical example of financial management practices in bankruptcy scenarios.
Tips
- A common mistake is forgetting to factor in the liquidator's remuneration when calculating the final amount payable to creditors. To avoid this, clearly outline your equations and ensure all components are included.
- Confusing the total available amount with the net amount after remuneration can also lead to calculation errors.
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