Hari and Hannah were in partnership trading under the name 'Hana Traders' and sharing profits and...

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Hari and Hannah were in partnership trading under the name 'Hana Traders' and sharing profits and losses in the ratio of 1:3 respectively. On 31 December 2004, a winding up petition was lodged against the firm on which date the balances extracted from the books of the firm and the partners' separate estates were as follows: Current Estimated value value Sh. '000' Sh. '000' Assets Freehold property: Hana 11,000 12,000 Traders Hari 7,000 10,000 Plant and machinery: Hana 3,000 1,500 Traders Furniture and fixtures: Hana 1,000 800 Traders Hari 1,500 1,200 Hannah 1,800 1,500 Inventory Hana Traders 8,000 6,500 Accounts receivable: Hana 12,000 See (note Traders 1) Investments: Hari 1.500 2,400 Hannah 2,000 1,900 Liabilities Mortgage on freehold property: 6,000 Hana Traders 5,000 Hari Bank overdraft: Hana Traders 7,000 Accounts payables: Hana Traders 19,000 Hari 700 Hannah 2,400 Additional Information: 1. Of the accounts receivable. Sh.9 million is estimated to be good while Sh.1 million is estimated to be bad. 50% of the remaining debts are expected to be paid. 2. The preferential accounts payables for Hana Traders, Hari and Hannah were Sh.1,100,000. Sh.300,000 and Sh.500,000 respectively. 3. Hana Traders bank overdraft was secured by a second mortgage on the partnership freehold property and by the deposit of Hari's investments together with his personal guarantee. Required: Using the format laid down in the Bankruptcy Act (Cap 53) and showing the legal position in relation to the double proof. Prepare a) Statement of affairs as at 31 December 2004. (10 marks) b) Deficiency or surplus accounts as at 31 December 2004 marks) (Total: 20 marks) NUMBER FIVE (10 a) Briefly explain the following terms as used in trust and executorships accounting: i) marks) legacy Life tenant(2 General legacy (2 marks) Demonstrative (2 marks) b) The will of Dennis a, who died on 23 January 2004, contains the following provisions: I leave my house and personal effects to my wife Winnie I leave Sh.9,000 in cash to my son Isaac I leave all my investments to Timao Any income earned on my investments prior to distribution, I leave to my priest Father Anto. I leave the remainder of my estate toRichards Additional Information: 1. The executor, Kariuki, took an inventory of the assets of the testator and determined their fair value at the time of Dennis's death to be as follows: Shs. Cash 40,000 Household an personal 310,000 effects Investments: Stocks 21,000 Bonds 44,000 Land (rental property) 65,000 Antiques 19,000 Dividend receivable 1,000 Interest receivable 2,000 Rent receivable 4,000 512,000 2. The following Valid claims were made against the estate and paid by the executor: Sh. Funeral expenses 17,000 Executor charges 9,000 Medical expenses 11,000 Debts 5,000 3. The following cash collections were received by the estate Dividend Interest Rent Sale of antiques 2,000 3,000 7,000 21,000 4. Prior to 25 June the date the charge and discharge statement was prepared, the executor had made complete distribution to both Winnie and Isaac Required: A charge and discharge statements for the estate of Dennis (14) marks) (Total: 20 marks) Hari and Hannah were in partnership trading under the name 'Hana Traders' and sharing profits and losses in the ratio of 1:3 respectively. On 31 December 2004, a winding up petition was lodged against the firm on which date the balances extracted from the books of the firm and the partners' separate estates were as follows: Current Estimated value value Sh. '000' Sh. '000' Assets Freehold property: Hana 11,000 12,000 Traders Hari 7,000 10,000 Plant and machinery: Hana 3,000 1,500 Traders Furniture and fixtures: Hana 1,000 800 Traders Hari 1,500 1,200 Hannah 1,800 1,500 Inventory Hana Traders 8,000 6,500 Accounts receivable: Hana 12,000 See (note Traders 1) Investments: Hari 1.500 2,400 Hannah 2,000 1,900 Liabilities Mortgage on freehold property: 6,000 Hana Traders 5,000 Hari Bank overdraft: Hana Traders 7,000 Accounts payables: Hana Traders 19,000 Hari 700 Hannah 2,400 Additional Information: 1. Of the accounts receivable. Sh.9 million is estimated to be good while Sh.1 million is estimated to be bad. 50% of the remaining debts are expected to be paid. 2. The preferential accounts payables for Hana Traders, Hari and Hannah were Sh.1,100,000. Sh.300,000 and Sh.500,000 respectively. 3. Hana Traders bank overdraft was secured by a second mortgage on the partnership freehold property and by the deposit of Hari's investments together with his personal guarantee. Required: Using the format laid down in the Bankruptcy Act (Cap 53) and showing the legal position in relation to the double proof. Prepare a) Statement of affairs as at 31 December 2004. (10 marks) b) Deficiency or surplus accounts as at 31 December 2004 marks) (Total: 20 marks) NUMBER FIVE (10 a) Briefly explain the following terms as used in trust and executorships accounting: i) marks) legacy Life tenant(2 General legacy (2 marks) Demonstrative (2 marks) b) The will of Dennis a, who died on 23 January 2004, contains the following provisions: I leave my house and personal effects to my wife Winnie I leave Sh.9,000 in cash to my son Isaac I leave all my investments to Timao Any income earned on my investments prior to distribution, I leave to my priest Father Anto. I leave the remainder of my estate toRichards Additional Information: 1. The executor, Kariuki, took an inventory of the assets of the testator and determined their fair value at the time of Dennis's death to be as follows: Shs. Cash 40,000 Household an personal 310,000 effects Investments: Stocks 21,000 Bonds 44,000 Land (rental property) 65,000 Antiques 19,000 Dividend receivable 1,000 Interest receivable 2,000 Rent receivable 4,000 512,000 2. The following Valid claims were made against the estate and paid by the executor: Sh. Funeral expenses 17,000 Executor charges 9,000 Medical expenses 11,000 Debts 5,000 3. The following cash collections were received by the estate Dividend Interest Rent Sale of antiques 2,000 3,000 7,000 21,000 4. Prior to 25 June the date the charge and discharge statement was prepared, the executor had made complete distribution to both Winnie and Isaac Required: A charge and discharge statements for the estate of Dennis (14) marks) (Total: 20 marks)