What Happens During the Liquidation Process?

Liquidation losses are losses that occur during the liquidation process. Including the loss of property disk losses during the liquidation process, the loss of realisation of the property, the valuation loss of the property that does not need to be realised, operating losses, bad debt losses, write-off losses, etc.

Liquidation loss

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Liquidation

The contents of liquidation losses include the following items:

(1) Loss of property disk loss is recorded at book value;

(2) Property realization loss, that is, the difference between the actual realized value and the book value;

(3)

The liquidation losses incurred during the liquidation of an enterprise mainly include loss of property in the course of liquidation, loss of revaluation of property, loss of realisation of property, loss of bad debts, and operating losses during the liquidation period.

The occurrence of various liquidation losses is accounted for by setting up a "liquidation loss" account. When the relevant liquidation loss occurs, the debit to the "liquidation loss" account is credited to the relevant account lender; after the liquidation of the enterprise is completed, all the liquidation losses that occurred in the liquidation process, that is, the balance of the "liquidation loss" account will be transferred Enter the "liquidation gains" account and pass the credit of the "liquidation losses" account when carried forward. The "liquidation loss" account shall set up a detailed account according to the loss items for detailed classification and accounting.

Example 1: During the liquidation process, Company A found an inventory loss equipment with a book value of 50,000 yuan and a depreciation of 20,000 yuan; a loss of 40 kilograms of A material and a book value of 1,000 yuan should be recorded To:

Borrowing: liquidation loss-loss of 30,000 on fixed assets

1000 losses in current assets

Accumulated depreciation 20000

Credit: 50,000 fixed assets

Raw materials-A material 1000

Example 2. For a batch of backlog of materials, the book value is the actual cost of 65,000 yuan at the time of acquisition, and it is confirmed by revaluation at the time of liquidation, and the value is 40,000 yuan. The revaluation loss amounted to 25,000 yuan. Should be recorded as:

Borrow: liquidation loss-25,000 less material revaluation loss,

Loan: Raw materials 25000

Example 3. One machine and equipment was sold, the original value was 50,000 yuan, and the depreciation was 20,000 yuan. When selling, the price was negotiated with the purchaser at 18,000 yuan, and the bank notified that the price had been received. Should be recorded as:

Borrow: bank deposit 18000

Accumulated depreciation 20000

Liquidation loss-12000 real estate loss

Credit: 50,000 fixed assets

Example 4: The account receivable is 40,000 yuan, because the debt unit has been cancelled, it cannot be recovered. Should be recorded as:

Borrow: liquidation loss-bad debt loss 40,000

Credit: Accounts receivable-XX unit 40,000

Example 5: At the end of the liquidation of the company, the various losses incurred during the liquidation, that is, the balance of the "liquidation loss" account, are transferred to the "liquidation gain" account, which totals 108,000 yuan and should be recorded as:

Borrow: clearing income 108000

Loan: Liquidation Loss-Loss of Fixed Assets Loss of 30,000

1000 losses in current assets

-Material revaluation loss 25000

Realized loss of fixed assets 12000

Bad debt loss 40,000