Closing a Pte Ltd

[furious_88]

onsidering lkh66 couldn't be bothered to reply when I solved his problem, what do you mean by "zeroize"? That's not an accounting term.[/quote]

Erm means all to 0 so that i can write off my company.
I have about 27k in stocks. Do i create an inv and sell all with $0. To bring the amount down to 0?

[Strong Eagle]

You can have $27K in stocks and no cash, no inventory, no assets. The your stock, purchased at $27K is worth nothing. What is the value of your net worth account? That is what matters.

For example, you start up your company by paying $27K for your stock.

Your general ledger entries look like this:

Debit - Cash - $27,000
Credit - Paid up capital - $27,000

Then your balance sheet looks like this.

Assets
--Cash in bank - $27,000

Liabilities
--None - $0

Net Worth
--Paid up capital - $27,000

Total liabilities and net worth - $27,000

Now, the next month you go out an spend all your cash on whores at four floors.

Your general ledger looks like this

Credit - Cash - $27,000
Debit - Whores - $27,000

Your income statement looks like this.

Income
--None - $0

Expenses
--Whores - $27,000

Net Profit/Loss - ($27,000)

And your balance sheet looks like this.

Assets
--Cash - $0

Liabilities
--None - $0

Net Worth
--Paid up capital - $27,000
--Retained earnings, prior period - ($27,000)
Total Net Worth - $0

Total Liabilities and Net Worth - $0

So... if you have any creditors to whom you owe money, you pay them off. If there are any assets left you sell them for cash or award them to yourself as payment in kind. If there is any cash left after that you pay yourself a dividend or directors fees. If you have kept your books correctly, you will have zero assets, zero liabilities, and zero net worth. It doesn't matter what the value of your stock is worth.

[furious_88]

You can have $27K in stocks and no cash, no inventory, no assets. The your stock, purchased at $27K is worth nothing. What is the value of your net worth account? That is what matters.

For example, you start up your company by paying $27K for your stock.

Your general ledger entries look like this:

Debit - Cash - $27,000
Credit - Paid up capital - $27,000

Then your balance sheet looks like this.

Assets
--Cash in bank - $27,000

Liabilities
--None - $0

Net Worth
--Paid up capital - $27,000

Total liabilities and net worth - $27,000

Now, the next month you go out an spend all your cash on whores at four floors.

Your general ledger looks like this

Credit - Cash - $27,000
Debit - Whores - $27,000

Your income statement looks like this.

Income
--None - $0

Expenses
--Whores - $27,000

Net Profit/Loss - ($27,000)

And your balance sheet looks like this.

Assets
--Cash - $0

Liabilities
--None - $0

Net Worth
--Paid up capital - $27,000
--Retained earnings, prior period - ($27,000)
Total Net Worth - $0

Total Liabilities and Net Worth - $0

So... if you have any creditors to whom you owe money, you pay them off. If there are any assets left you sell them for cash or award them to yourself as payment in kind. If there is any cash left after that you pay yourself a dividend or directors fees. If you have kept your books correctly, you will have zero assets, zero liabilities, and zero net worth. It doesn't matter what the value of your stock is worth.

Dear Strong eagle, thanks a million for your detailed worksheet. Can i just follow your worksheet and summit up.

[furious_88]

I have attach a pic for your ref . Generated by quickbook.

[Strong Eagle]

Dear Strong eagle, thanks a million for your detailed worksheet. Can i just follow your worksheet and summit up.

Sure... especially if you're going to claim $27,000 in expenses for whores at Four Floors.

[furious_88]

Dear Strong eagle, thanks a million for your detailed worksheet. Can i just follow your worksheet and summit up.

Sure... especially if you're going to claim $27,000 in expenses for whores at Four Floors.

Lol thank you very much

[furious_88]

Hi Strong eagle,
could you help me see which one I can edit to 0 . like the example u gave earlier on. and if I want to close the company. Can I set it as end of Dec 2015 or End Aug 16

ASSETS
Current Assets
Current/Savings
xxxx Pte. Ltd. 11,350.45
Total Current/Savings 11,350.45
Other Current Assets
Stock Asset 27,184.27
Total Other Current Assets 27,184.27
Total Current Assets 38,534.72
TOTAL ASSETS 38,534.72
LIABILITIES 0.00
NET ASSETS 38,534.72
EQUITY
Retained Earnings 38,354.72
Net Income 180.00
TOTAL EQUITY 38,534.72

[Strong Eagle]

The stocks under Other Current Assets... is this stock you own in other companies?

You don't show any paid up capital at all. Is this correct? Or is the stock you listed under Other Current Assets the stock you bought in your own company?

Your retained earnings came from the profit you made? That's what retained earnings means.

Net Income is a P&L item, not a Balance Sheet item. Please clarify what this is.

[furious_88]

The stocks under Other Current Assets... is this stock you own in other companies?

You don't show any paid up capital at all. Is this correct? Or is the stock you listed under Other Current Assets the stock you bought in your own company?

Your retained earnings came from the profit you made? That's what retained earnings means.

Net Income is a P&L item, not a Balance Sheet item. Please clarify what this is.

The stocks are own by my own company. May be when I keep in the stocks I key in as current stocks.
I also think its very confusing .esp I am not into accounts.
This report is generated by my quickbook software.

[Strong Eagle]

If the stocks you own are in your own company, then you balance sheet is all messed up. If you own stocks in a different company, that is an asset. Based on what you have said, that "The stocks are own by my own company", then we need to fix things.

First of all, the only asset you have is the cash in the savings account. The stock belongs in your net worth account.

ASSETS
-- Cash in savings account - $11,350.45
Total Assets - $11,350.45

LIABILITIES
-- None - $0.00

NET WORTH
-- Paid up capital (stock held) - $27,184.27
-- Retained earnings, prior period ($15,833.82)
Total Net Worth - $11,350.45
Total Liabilities and Net Worth - $11,350.45

Do you understand why it has to be this way with the information you have given me?

1. If you have $27,184.27 in stock holdings, then that means you must have put up this much in cash or the equivalent in other assets like buildings or machinery.
2. But now, you only have $11,350.45 in cash in a savings account.
3. That means, that over the course of operations, the business had to lose $15,833.82 since you started out with more than $27K.

Now, if you want to draw all the money out of the account in the form of dividends to you so that you close the company, you need two journal entries.

Credit - Cash - $11,350.45
Debit - Dividends paid - $11,350.45

Then your balance sheet looks like this and you can close the company.

ASSETS
-- Opening balance - Cash in savings account - $11,350.45
-- Less cash paid out for dividends - ($11,350.45)
Total Assets - $0.00

LIABILITIES
-- None - $0.00

NET WORTH
-- Paid up capital (stock held) - $27,184.27
-- Retained earnings, prior period - ($15,833.82)
-- Dividends paid out - ($ $11,350.45)
Total Net Worth - $0.00
Total Liabilities and Net Worth - $0.00

Having said that, I still don't think that your financial statements are correct. Most of the time, paid up capital is in even dollar amounts... for example, you purchase 27,000 shares at $1 each. You would only have odd dollar amounts like you do if you contributed buildings or machinery or equipment that had exactly that value.

And if you had contributed any of the above, then you would depreciate them so that they were worth less each year.

Bottom line: Based upon the information you have provided, I have given you one view of a working balance sheet. But, someone really needs to review the entire transaction history of your business to know what it ought to look like.

Therefore, I conclude my post with these words. What I have posted for you is just a guess. It may be completely incorrect as I have had no opportunity to review the financials of your company. I accept no responsibility whatsoever for any outcome resulting from you using what I have posted.

[furious_88]

If the stocks you own are in your own company, then you balance sheet is all messed up. If you own stocks in a different company, that is an asset. Based on what you have said, that "The stocks are own by my own company", then we need to fix things.

First of all, the only asset you have is the cash in the savings account. The stock belongs in your net worth account.

ASSETS
-- Cash in savings account - $11,350.45
Total Assets - $11,350.45

LIABILITIES
-- None - $0.00

NET WORTH
-- Paid up capital (stock held) - $27,184.27
-- Retained earnings, prior period ($15,833.82)
Total Net Worth - $11,350.45
Total Liabilities and Net Worth - $11,350.45

Do you understand why it has to be this way with the information you have given me?

1. If you have $27,184.27 in stock holdings, then that means you must have put up this much in cash or the equivalent in other assets like buildings or machinery.
2. But now, you only have $11,350.45 in cash in a savings account.
3. That means, that over the course of operations, the business had to lose $15,833.82 since you started out with more than $27K.

Now, if you want to draw all the money out of the account in the form of dividends to you so that you close the company, you need two journal entries.

Credit - Cash - $11,350.45
Debit - Dividends paid - $11,350.45

Then your balance sheet looks like this and you can close the company.

ASSETS
-- Opening balance - Cash in savings account - $11,350.45
-- Less cash paid out for dividends - ($11,350.45)
Total Assets - $0.00

LIABILITIES
-- None - $0.00

NET WORTH
-- Paid up capital (stock held) - $27,184.27
-- Retained earnings, prior period - ($15,833.82)
-- Dividends paid out - ($ $11,350.45)
Total Net Worth - $0.00
Total Liabilities and Net Worth - $0.00

Having said that, I still don't think that your financial statements are correct. Most of the time, paid up capital is in even dollar amounts... for example, you purchase 27,000 shares at $1 each. You would only have odd dollar amounts like you do if you contributed buildings or machinery or equipment that had exactly that value.

And if you had contributed any of the above, then you would depreciate them so that they were worth less each year.

Bottom line: Based upon the information you have provided, I have given you one view of a working balance sheet. But, someone really needs to review the entire transaction history of your business to know what it ought to look like.

Therefore, I conclude my post with these words. What I have posted for you is just a guess. It may be completely incorrect as I have had no opportunity to review the financials of your company. I accept no responsibility whatsoever for any outcome resulting from you using what I have posted.

ok can. I just give a try..Thanks for your generous help

[Andreo]

Hello,

I was googling this topic and am blown away by the helpful tips you provided here! I'm also closing down my Pte Ltd, which used to be a one-man show, and as such am trying to do it cost efficiently and "hands on".

I used to do bookkeeping as well as annual filings myself, but for the final year I do have some specific questions. Is there a way to connect with you via private message? (I'm also open to connect to an affordable professional in that field, if you have someone to recommend or feel more comfortable with that.)

Cheers,
Andreo