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Question
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.
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Solution
Statement of Affairs of Shri V. R. Kulkarni as on 1st Jul 2017
| Assets | Estimated Realisable Value Rs. |
| Assets not specifically pledged (List A) : | |
| Cash in hand | 2,000 |
| Trade Debtors | 1,12,000 |
| Calls in Arrears | 10,000 |
| Investments | 8,000 |
| Stock | 4,000 |
| Machinery | 1 20,000 |
| Assets specifically pledged (L isT B) |
| Assets | Estimated Realisable Value Rs. |
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| Leasehold 1.46,000 36.000 - 1,10.000 | |||||||||
| Property | |||||||||
| Estimated surplus from assets specifically pledged | 1.10,000 | ||||||||
| Estimated total assets available for preferential creditors, debentureholders secured by a floating charge and unsecured creditors | 3,66,000 | ||||||||
| Summary of Gross Assets | |||||||||
| Gross realisable value of assets specifically | |||||||||
| Pledged 1,46,000 | |||||||||
| Other Assets 2,56,000 | |||||||||
| Gross Assets 4,02,000 |
| Gross Liabilities Liabilities | |||
| 18,000 Secured Creditors (List B) to the extent to which claims are estimated to be covered by assets specially pledged. | |||
| 2,000 | Preferential Creditors (List C) | 2,000 | |
| Estimated balance of assets available for debentureholders | |||
| secured by a floating charge and unsecured creditors | 3,64,000 | ||
| 1,00,000 | Debentureholders secured by a floating charge (List D). | (-) 1,00,000 | |
| Estimated surplus as regard debentureholders | 2,64,000 | ||
| Unsecured Creditors (List E) | Rs. | ||
| Liabilities for purchases | 40,000 | ||
| 40,160 | Telephone Rent Outstanding | 160 | (-)40,160 |
| Estimated surplus as regards creditors (Bing the difference between gross assets and gross liabilities) | 2,23,840 | ||
| Issued and called up capital (List G) | (-) 1,60,000 | ||
| Estimated Surplus as regards contributories (List H) | 63,840 | ||
Surplus Account (List H)
| Items reducing Surplus : | Rs. | Rs. |
| Excess of capital and liabilities over assets, i.e. Profit and Loss Account | 70,000 | |
| Estimated losses now written off for which provision has been made for the purpose of preparing the statement: | ||
| Investment(Rs.12,000 - Rs.8,000) | 4,000 | |
| Preference creditors for taxes and wages | 2,000 | (+) |
| Telephone rent outstanding | 160 | 6,160 |
| 76,160 | ||
| Items contributing to Surplus : | ||
| Machinery (Rs.1,20,000 -Rs.60,000) | 60,000 | |
| Leasehold properties (Rs.1,46,000 - Rs.80,000) | 66,000 | |
| Stock (Rs.4,000 - Rs.2,000) | 2,000 | |
| Debtors : Provision for Bad Debts 20,000 | ||
| (-) Bad Debts 4,000 | ||
| 16,000 | ||
| (-) Doubtful Debts4,000 8,000 | 12,000 | 1,40,000 |
| Surplus as shown by the statement of affairs | 63,840 |
