Mwakibete of Kareli suffered a series of misfortunes and was unable to meet his maturing debts obligations. Following a creditors petition, a R/O was made on him at the end of April 2005 and he was subsequently adjudged bankrupt.

The following is a list of his assets and Liabilities for his business, Kareli New Life Bar, as at 30th April 2005;

	Book Values Shs	ERV Shs
Land and Building	1,125,000	1,325,000
Motor vehicles	750,000	650,000
Cooling equipment	500,000	375,000
Furniture and fittings	425,000	297,000
Current assets
Stock in trade	45,000	20,000
Debtors	987,500	650,000
Cash and bank balance	75,000
Current liabilities
Trade creditors	500,000
Expense creditor	600,000
Wages and salaries	50,000
Tax payable	125,000

Other balances:

Drawings for the year 360,000

Long term Loans:

Igurusi Credit union (secured on Land
(building)	1,500,000
Karadha Ltd (secured on Motor vehicles) Loan 500,000
12% interest 60,000	560,000

Tanzania Oxygen Ltd (secured on Cooling equipments)

Loan	400,000
10% interest	40,000	440,000

You ascertain that Mr. Mwakibete made a loss of shs 250,000 during the year ended April 2005. In addition you are informed that:

Expense creditors include local government rates for two years at shs. 5,000 per annum.

Tax payable includes shs 60,000 which is preferential in nature, and a sum of shs 15,000 which Mr. Mwakibete owes as value added tax due to the Malawi Government following his recent participation in trade exhibitions in that country.

Wages and salaries payable include shs. 6,000 payable to bartender who was recently laid off in a cost reduction exercise, the amount being that workmans compensation.

Other amounts included in wages are;

Workers name Period Monthly pay Total shs.

A	December 2004 to April 2005	1,500	7,500
B	April 2005	5,000	5,000
C	January to April 2005	3,000	12,000
D	December 2004 to April 2005	600	3,000
E	March & April 2005	5,000	10,000
F	December 2004 to April 2005	900	4,500
G	March & April 2005	1,000	2,000
			44,000

A further sum of shs 12,000 is expected to be payable to other workers if Mr. Mwakibete is compelled to lay them off due bankruptcy. This amount is not yet due.

Mr. Mwakibete has a private house which was recently independent valued at shs. 200,000. It is, however, expected that it would fetch only shs. 150,000 in a forced sale.

Mwakibetes domestic servant who won shs 100,000 in Mbeya District lottery had deposited this amount with him for safe custody. She was now thinking of claiming this money, together with 5 months unpaid salary, at shs 2,000 per month.

Mwakibete having divorced his first wife is paying alimony of shs 2,000 per month. He is in arrears for alimony payments for 6 months.

Mzee Hamisi, a close friend of Mwakibete, is known to have given refuge to Mwakibete in mid February 2005, so as to give him a breathing space from pressing creditors. He subsequently sold goods to Mwakibete amounting to shs 20,000 for use in the bar, this amount being included in the trade creditors and lent him shs 50,000 for childrens school fees.

The owner of Ndaga Supermarket has stopped supplying Mwakibete with food on credit because Mwakibete seems reluctant to pay back an accumulated debt of shs 75,000

In attempt to increase his fortunes, Mr. Mwakibete took to gambling, but unfortunately he has run up gambling debt of shs 33,000

Mwakibetes personal belongings- Clothe, beddings etc are valued at shs 40,000 Required:

Prepare a Statement of Affairs and Deficiency Account to be submitted to the official receiver.