USA Closing a subsidiary

[AGH the CPA]

assume the following:

cash in bank 50,000
accounts receivable 5,000
prepaid expenses 4,000
fixed assets 1,000

total assets 60,000

accounts payable 200,000
Stock 100,000
retained earnings -150,000
net income -90,000

total liabilities and equity 60,000

I have the following:
get paid for AR
DR cash 5k
CR AR 5k

recoup prepaid
DR cash 4k
CR prepaid 4k

sell assets at loss for $500
DR cash $500
DR loss $500
CR asset $1000

cash balance is 59,500.

Investors are willing to put in $ to clear payables so assume further investment of 140,500
DR cash 140,500
CR stock/PIC 140,500

clear payables
DR AP 200,000
CR cash 200,000


ASSETS ZERO

STOCK 240,500

RE (150,000)

NI (90,500)

STOCK & LIABILITIES ZERO

Now what??

 

[Asha Kanta Sharma]

What exactly you want from us ?

 

[AGH the CPA]

What exactly you want from us ?

This is from last fall. It has been resolved.

 

[Werner Reisacher]

From an accounting point of view, you closed "the books" of this company. From a legal and tax point of view, you must check with the Secretary of State of the State in which this company is incorporated, whether you need prior approval before redeeming the share capital of the company. In addition, there are also local, State, and Federal tax and some legal requirements to report and file a "final closing report" with these offices.

 

[Kat Maple]

I see we need a new forum category called:
"Answers to questions that you never asked"


Kat

 

[kirby]

Funny post, Kat. And so true. Been happening a lot lately.

Another potential category could be "Answers to questions posed a year or more ago". We could call the category "Tomb Raider" !