Find statement of affairs and a deficiency account

Reference no: EM13181679

The following information is extracted from the books of Veer & Co Ltd. on 31 December 2010 on which date a winding up order was passed.

	$
Unsecured Creditors	1,90,000
Salary Due for 5 months	20,000
Bills Payable	53,000
Debtors:
Good	2,15,000
Doubtful (Estimated Recovery $31,000)	65,000
Bad	44,000
Bills Receivable (Good $8,000)	8,000
Bank Overdraft	20,000
Land (Estimated to Produce $2,50,000)	1,80,000
Stock (Estimated to Produce $2,90,000)	4,10,000
Furniture & Fixtures	40,000
Cash in Hand	2,000
Estimated Liability for Bills Discounted	30,000
First Mortgage Creditors on Land	2,00,000
Second Mortgage Creditors on Land	1,00,000
Wages Unpaid	3,000
Liabilities Under Workmen's Compensation Act	1,000
Income Tax Due	4,000
2,500 9% Debentures of $100 Each (Interest Paid on 30 June 2010)	2,50,000
Share Capital:
10,000 10% Preference Shares of $10 Each	1,00,000
25,000 Equity Shares of $10 Each	2,50,000
General Reserve on 31 December 2010	50,000

In 2006, the company earned a profit of $2,25,000 but thereafter it suffered a trading loss totaling $2,92,000. The company also suffered a loss on account of fire $25,000 during the year 2007.

Excise authorities imposed a penalty of $1,75,000 in 2008 for evasion of tax which was paid in 2009. From the above information, prepare a statement of affairs and a deficiency account.

Reference no: EM13181679

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