Correct ANSWER with EXPLANATION, otherwise I will downvote.

allendy Problem 2: Statement of Affairs and Deficiency Statement when accounts are made properly: The following information was extracted from the books of a limited Company on 31st March, 2003 on which date a winding up order was made: Particulars Rs. Equity share capital 20,000 shares of Rs. 10 each List ei 2,00,000 14% preference share capital - 30,000 shares of Rs.10 each L-E 3,00,000 Calls in arrears on Equity shares (estimated to realise Rs.2.000) LA 4,000 14% First Mortgage Debentures secured by a floating charge on 2,00,000 the whole of the assets of the Company (interest paid to date) Creditors having a mortgage on the Freehold Land & Buildings L-3 85,000 Creditors having a second charge on Freehold Land & Buildings L-B 90,000 Trade Creditors L-E 2,70,000 Bills discounted (of these bills for Rs. 15,000 are expected to be dishonoured) -E 40,000 Unclaimed Dividends L- E 6,000 Bills payable 1-t 10,000 Income tax due 25,000 10 pand till 1 Salaries and wages (for 5 months) L-c & L-E 40,000 Bank Overdraft secured by a second charge on the whole of the assets of the Co. 20,000 Cash in hand L-a 1,200 Debtors (of these Rs.60,000 are good; Rs. 15,000 are doubtful, estimated to 90,000 realise Rs.5,000 and the rest bad). 1-A (osoba) Bills of Exchange (considered good) LA 35,000 Freehold Land & Buildings (estimated to realise Rs. 1,65,000) L B 1,50,000 Plant & Machinery (estimated to produce Rs.90,000) LA 1,20,000 Fixtures and Fittings (estimated to produce Rs.8,000) LA 12,000 Stock in trade (estimated to produce 25% less) 80,000 Patents (estimated to produce Rs.45,000) La 70,000 On 31st March, 1997, the Company's share capital stood at the same figures as on March, 2003 but in addition, there was a General Reserve of Rs.65,000. In 1997-98 the Company earned a profit of Rs. 1,43,000 but thereafter it suffered trading losses totaling in all Rs.4,67,000. In 1999- 2000 a speculation loss of Rs.91,000 was incurred. Preference dividend was paid for 1997-98 and 1998 - 99 and on equity shares a dividend of 15% was paid for 1997-98 only. Excise authorities imposed a penalty of Rs. 1,60,000 for evasion of excise and income tax authorities imposed a penalty of Rs.60,400 for evasion of tax. Prepare the Statement of Affairs and the Deficiency A/c. LA 31st