The statement of affairs-bankruptcy accounts, Financial Accounting

The Statement of Affairs

The statement of affairs sets out:

(a) The various assets of the debtor, at the values they are expected to realise;
(b) The creditors, classified according to their "priority".

The balancing figure on the statement of affairs is the estimated deficiency  as at the date at which it was prepared.

For a sole trader, one statement of affairs will be prepared to include all assets and liabilities, whether private or business.

For a partnership, a statement of affairs is prepared in respect of the partnership assets and liabilities-called the joint estate. A separate statement is also prepared for each partner, showing his personal assets and liabilities.  Any surplus on a separate estate becomes an asset of the joint estate and vice versa.

The pro-forma statement of affairs sets out the order in which assets are shown. The order in which liabilities are discharged is:

  1. Secured creditors, out of the proceeds of their security;
  2. Costs and expenses of the bankruptcy; (these are not included in the Statement of Affairs because they have not been incurred at the date at which it is prepared);
  3. Pre-preferential creditors;
  4. Preferential creditors;
  5. Unsecured creditors;
  6. Deferred creditors;
  7. Any balance to the debtor.
Posted Date: 12/13/2012 2:59:05 AM | Location : United States







Related Discussions:- The statement of affairs-bankruptcy accounts, Assignment Help, Ask Question on The statement of affairs-bankruptcy accounts, Get Answer, Expert's Help, The statement of affairs-bankruptcy accounts Discussions

Write discussion on The statement of affairs-bankruptcy accounts
Your posts are moderated
Related Questions
Five years ago Ramon Millan quit his job as an associate at a large law firm and opened a burger joint in Malibu. His innovative use of aged blue cheeses and specialty sauces resul


Explain:- Q.1 Explain the ways in which the needs of internal and external users of accounting information are the same and different. Q.2 Why is it important for financial sta

How do I treat with Expenses Outstanding, for example, Marketing Expenses outstanding at year end is $1250. How do I adjust?. It is a note under the trial balance.

Find out the Current dividend per share:   Data Stock price = $ 65 Return = 11% Dividend Yield =  11/ 2 = 5.5 % (given) Formula: Dividend in one year = divid

what is the treatment of increase in allowance receivable.

Below are excerpts from Safeway's 2010 Annual Report, including its Consolidated Balance Sheets, a portion of Note E, Lease Obligations, and Note H, Taxes on Income, from the Notes

Question: The following data are obtained from the record of a factory:                                                        £                   £ Sales 4,000 units @ £2

Let us assume that you deposit Rs.1000 in a bank that pays 10 percent interest compounded yearly for a period of 3 years. The deposit will grow as given details: Fir

Protected transactions These fall into three categories: (A) Under Section 50: Payments by the bankrupt to creditors; Payments or deliveries to the bankrupt; C