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.