Topics
Amalgamation, Absorption and External Reconstruction (Excluding Intercompany Holdings)
Accounting of Transactions of Foreign Currency
- Accounting of Transactions of Foreign Currency
- Purchase of Goods in Foreign Currency
- Account for Foreign Currency Transactions
- Purchase of Fixed Assets in Foreign Currency
- Foreign Currency Loan
- Foreign Exchange Accounting
- Accounting of Transactions of Foreign Currency Problems
- Statement of Affairs and Deficiency Account Problems
Liquidation of Companies
Underwriting of Shares and Debentures
Accounting for Limited Liability Partnership
Related QuestionsVIEW ALL [3]
V. R. 'Kulkarni is appointed as a Liquidator of a company in Voluntary liquidation on 1st july, 2017 and the following balances are extracted from the books on that date:
| Liabilities | Rs. | Assets | Rs. |
| Capital: | |||
| 32,000 shares of Rs. 5 each | 1,60,000 | Machinery | 60,000 |
| Provision for Bad Debts | 20,000 | Leasehold Properties | 80,000 |
| Debentures | 1,00,000 | Stock in trade | 2,000 |
| Bank Overdraft | 36,000 | Book Debts | 1,20,000 |
| Liabilities for Purchases | 40,000 | Investments | 12,000 |
| Calls in Arrears | 10,000 | ||
| Cash in Hand | 2,000 | ||
| Profit and Loss Account | 70,000 | ||
| 3,56,000 | 3,56,000 |
The machinery is valued at Rs. 1,20,000, the Leasehold Properties at RS. 1,46,000, Investments at Rs. 8,000, Stock in Trade at ' Rs . 4,000, Bad debts are 'Rs. 4,000, Doubtful debts are 'Rs 8,000, estimated to realise Rs. 4,000. The Bank Overdraft is secured by deposit of title deeds of Leasehold Properties. Preferential creditors for taxes and Wages Rs. 2,000. Telephone rent owing is Rs. 1,600. You are required to make out (1) Statement of affairs as regards creditors and contributors and (2) Deficiency or Surplus Account.
The following information is extracted from the books of Surabhi Ltd. on 31st July 2017 on which· date a winding up order was made.
| Particulars | Rs. |
| Unsecured Creditors | 7,00,000 |
| Salaries due for five months | 40,000 |
| Managing Director's Remuneration Due | 60,000 |
| Bills Payable | 2,12,000 |
| Debtors - Good | 8,60,000 |
| - Doubtful ( estimateci to produce Rs.1,24,000) | 2,60,000 |
| -Bad | 1,76,000 |
| Bills Receivable (Good Rs. 20,000) | 32,000 |
| Bank Overdraft | 80,000 |
| Land (estimated to produce Rs.10,00,000) | 7,20,000 |
| Stock (estimated to produce Rs.11,60,000) | 16,40,000 |
| Furniture and Fixtures | 1,60,000 |
| Cash in Hand | 8,000 |
| Estimated liabilities for bills discounted | 1,20,000 |
| Secured creditors holding first mortgage on land | 8,00,000 |
| Partly secured creditors holding second mortgage on land | 4,00,000 |
| Weekly wages unpaid | 12,000 |
| Liabilities under Workmen's Compensation Act, 1925 | 4,000 |
| Income-tax due | 16,000 |
| 10,000 9% Mortgage Debentures of RS.100 each Interest payable to 30th June | |
| and 31st December, paid to 30111 June 2017 | 10,00,000 |
| Share Capital : | |
| 40,000 10% Preference Shares of Rs.10 each | 4,00,000 |
| 1,00,000 Equity Shares of Rs.10 each | 10,00,000 |
| General Reserve since 31st December, 2013 | 2,00,000 |
In 2013, the company earned profit Rs. 9,00,000 but thereafter it suffered trading losses totalling Rs.11,68,000.
The company also suffered a speculation loss of Rs.1,00,000 during the year 2014. Excise authorities imposed a penalty of' 7,00,000 in 2015 for evasion of tax which was paid in 2016. From the foregoing information, prepare the Statement of Affairs and the Deficiency Account.
The fallowing particulars were extracted from the books of XYZ Ltd. as on 31st March, 2017 on which day a winding-up order was made.
| Particulars | Rs. |
| Equity Share Capital: | |
| 20,000 shares of Rs10 each, Rs 5 paid-up | 1,00,000 |
| 14% pref share capital - | |
| 20,000 shares of Rs.10 each, fully paid | 2,00,000 |
| 14% mortgage debentures, secured by a floating charge upon whole of the assets of the company exclusive uncalled capitaL | 1,50,000 |
| Fully secured Creditors (value of securities Rs.35,000) | 30,000 |
| Partly secured Creditors (value of securities Rs. 10,000) | 20,000 |
| Preferential Creditors for Rates, Taxes, Wages etc | 6,000 |
| Bills Payable | 1,00,000 |
| Unsecured Creditors | 70,000 |
| Bank overdraft | 10,000 |
| B/R in hand | 15,000 |
| Bills Discounted (One bill of Rs.10,000 known to be bad) | 40,000 |
| Book Debts : (i) Goods | 10,000 |
| (ii) Doubtful (estimated to produce 50%) | 7,000 |
| (iii) Bad | 6,000 |
| Land and Building (estimated to produce Rs. 1,00,000) | 1,50,000 |
| Stock in-Trade (estimated to produce Rs. 40,000) | 50,000 |
| Machinery, tools etc. (estimated to produce Rs. 2,000) | 5,000 |
| Cash-in-hand | 100 |
You are require to prepare
(a) A statement of Affairs
(b) Deficiency Account.
