Due to the serious problems with the export market, Makadara Stores on 31³ December 2005received a compulsory order for winding up. The following particulars were disclosed:-Cash in handDebtorsLand and buildingsFurniture and fixturesUnsecured creditorsDebentures:3Secured on land and buildingsSecured by floating chargePreferential creditorsShare capital (3,200 shares of sh.100 each)Book valueSh.10,00040,000600,000200,000200,000420,000100,00060,000320,000Required:a) Prepare a Statement of Affairs as at 31st December 2005.b) Deficiency Account as at 31st December 2005.Estimatedto produceSh.10,00036,000480,000200,000Additional information1. Estimated liability for bills discounted was Sh.60, 000 estimated to rank at Sh.60, 000.2. Other contingent liabilities were Sh.120, 000 estimated to rank Sh.120,000.3. The company was formed on 1st January 2003; and had made losses of Sh.250, 000.

A statement of affairs is a statement that is prepared to show the assets and liabilities just like…

Due to the serious problems with the export market, Makadara Stores on 31 December 20 ceived a compulsory order for winding up. The following particulars were disclosed:- Cash in hand Debtors Land and buildings Furniture and fixtures Unsecured creditors Debentures: 3 Secured on land and buildings Secured by floating charge Preferential creditors Share capital (3,200 shares of sh.100 each) Book value Sh. 10,000 40,000 600,000 200,000 200,000 Lequired: a) Prepare a Statement of Affairs as at 31st December 2005. b) Deficiency Account as at 31st December 2005. 420,000 100,000 60,000 320,000 Estimated to produce Sh. 10,000 36,000 480,000 200,000 dditional information 1. Estimated liability for bills discounted was Sh.60, 000 estimated to rank at Sh.60, 00 2. Other contingent liabilities were Sh.120, 000 estimated to rank Sh.120, 000. 3. The company was formed on 1st January 2003; and had made losses of Sh.250,000.

Due to the serious problems with the export market, Makadara Stores on 31 December 20 ceived a compulsory order for winding up. The following particulars were disclosed:- Cash in hand Debtors Land and buildings Furniture and fixtures Unsecured creditors Debentures: 3 Secured on land and buildings Secured by floating charge Preferential creditors Share capital (3,200 shares of sh.100 each) Book value Sh. 10,000 40,000 600,000 200,000 200,000 Lequired: a) Prepare a Statement of Affairs as at 31st December 2005. b) Deficiency Account as at 31st December 2005. 420,000 100,000 60,000 320,000 Estimated to produce Sh. 10,000 36,000 480,000 200,000 dditional information 1. Estimated liability for bills discounted was Sh.60, 000 estimated to rank at Sh.60, 00 2. Other contingent liabilities were Sh.120, 000 estimated to rank Sh.120, 000. 3. The company was formed on 1st January 2003; and had made losses of Sh.250,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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