Optimists Ltd. resolved to wind up as on 31.12.2016 as members’ voluntary winding up. The Trial balance as on that date was:

On 1.1.2017 the liquidator sold some of the assets to Optimists (2017) Ltd for the following valuations: 

Plant ₹ 90,000; Goodwill ₹ 25,000; Stock ₹ 40,000. The purchase consideration was satisfied by 8% Debentures of ₹ 75,000 issued at 4% discount and the balance in cash. Preference shareholders are to be paid dividend upto the date of commencement of liquidation and 5% premium before anything is paid to equity shareholders. Debtors realised ₹ 40,000 gross, collection expenses being ₹ 500. Six months’ Debenture interest was received from Optimists (2017) Ltd. on 30.6.2017. The creditors were discharged subject to 5% discount. Liquidation expenses amounted to ₹ 800 and liquidator’s remuneration was paid ₹ 4,000. Preference shareholders are paid in cash with premium and dividend. The debentures and cash balance were paid to the equity shareholders. Prepare:

(a) Statement of Affairs as on 31.12.2016 on the basis of facts known as on that date and the agreement with Optimists (2017) Ltd.;

(b) Deficiency Account upto 31.12.2016.

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Liabilities Equity Share Capital (* 10 each fully paid) 8% Cumulative Preference Shares ( 10 each fully paid) Plant - Cost Depreciation Provision Stock on 31.12.2016 Sundry Debtors and Creditors Profit and Loss Account Balance on 1.1.2016 Loss in 2016 Preference Dividend - Paid for half year upto June 30 Preliminary Expenses Bank Dr. (3) 1,60,000 66,000 50,000 15,000 1,200 4,800 8,000 3,05,000 Cr. (3) 1,50,000 30,000 30,000 60,000 35,000 3,05,000