Solution-1

Solution:
Statement of Affairs of Mr. Ali Haider
As at 31 December 2010

Book Estimated Liabilities (as stated Expected

Assets (as stated and value to produce and estimated by to Rank
estimated by Debtor) (Tk) (Tk) Debtor) Tk (Tk)

Stock 1,500,000 900,000 Creditors fully secured: Nill

Machinery 1,600,000 1,100,000

Creditors partly
Book debt/Receivables secured: Nill

Good 800,000 800,000

Doubtful 200,000 100,000 Preferential creditors:

4,100,000 2,900,000 Clark salary (30 Person) 50,000

Deduct as per contra 50,000

Less: Receiver fees Nill

0n first Tk 1,000,000 @ 10% 100,000

Remaining on Tk 1,900,000
@ 5% 95,000 Bank loan 800,000

195,000

2,705,000 Unsecured creditors 4,030,000

Preferential creditors deduct
as per contra
50,000

Amount available for bank overdraft 2,655,000

and unsecured creditors

Add: Amount collected for payment

of bank overdraft from sale of Pvt

property. (From distribution schedule) 45,471

Deficiency (balancing figure) 2,129,529

4,830,000 4,830,000
 Deficiency Account
for the year ended 31 December 2010
Particulars Tk Particulars Tk
Opening capital 700,000 Business loss 780,000
Amount collected for payment of Bad debt 100,000
bank overdraft from sale of Private 45,471
Property Drawings 700,000
Deficiency as per Statement of Affairs 2,129,529 Other losses:
Stock 600,000
Machinery 500,000
Receiver's fees 195,000
2,875,000 2,875,000

Distribution Schedule
Tk
Creditors Total payable Net payable Percentage
Bank overdraft
Collection from business 800,000 754,529 94.32%
Collection from Pvt
Property due to lodge as
security 45,471 5.68%
800,000 100.00%
Unsecured Creditors 4,030,000 1,900,471 47.16%

100:50 percent Test:

Amount available 2,655,000
Bank overdraft 800,000
Amount available after 100%
payment of bank loan: 1,855,000
Unsecured creditors; 4,030,000
At least 50% 2,015,000
So the remaining amount is not sufficient to settle at least 50% of unsecured
creditors.
So, the distribution ratio will be 800,000 : 2,015,000
800 : 2015
Summation 2815
(2655000 x
800/2815)
Payment for bank loan (O/D) = 754,529
(2655000 x
2015/2815)
Payment for unsecured creditors = 1,900,471
2,655,000
 Working -1:
Trail Balance
as at 31 December 2009

Cr
Particulars Dr balance balance
Stock/Inventory 1,500,000
Drawings 700,000
Debtors 1,000,000
Machinery 1,600,000
Bank overdraft 800,000
Unsecured creditors 4,030,000
Clark Salary (30 person) 50,000
Capital 700,000
Business loss (balancing figure) 780,000
5,580,00
Total 5,580,000 0

Solution-2

STATEMENT OF AFFAIRS

ASSETS BOOK ESTIMATED LIABILITIES TAKA EXPECTED

VALUE TO TO RANK
PRODUCE

Patents 70,000 45,000 Creditors Fully Secured 85,000

Stock in Trade 80,000 60,000 Less: Fair Value of Free Hold
Fixture and Fittings 12,000 8,000 Land 1,65,000
Plant and Machinery 1,20,000 90,000 (-) Receiver’s Fee
Bill of Exchange 35,000 35,000 (1,65,000 * 4%) (6,600) (1,58,400)
Cash in Hand 2,000 2,000
Calls in Arrear 4,000 2,000 Surplus After Meeting Secured 73,400
Debtors: Creditors
Good 60,000 60,000 Less: Amount Paid to Partly (90,000)
Doubtful 15,000 5,000 Secured Creditors
Bad 15,000 0
Amount to be shown as
16,600
4,13,000 3,07,000 Unsecured Creditors

Less: Receiver’s fee Debentures 2,00,000

{( 3,07,000)-2,000} * 10%) (30,500) Less: Deducted As per Contra (2,00,000)
0
 2,76,500 Preferential Creditors:
Income Tax Due 25,000
Debentures Deducted as per (2,00,000) Salary 40,000 65,000
Contra 76,500
Less: Deducted As per Contra
(65,000) (65,000) 0
Preferential Creditors Deducted
as per Contra Bank Overdraft 20,000
Unsecured Creditors:
Amount Available for Bank Trade Creditors 2,70,000
Overdraft and Unsecured 11,500 Unclaimed Dividends 6,000
Creditors Bills Payable 10,000
Bills Discounted 15,000
Deficiency Account 3,26,100 Amount Unsecured From
Secured Creditors 16,600 3,17,600

3,37,600 3,37,600

DEFICIENCY ACCOUNT

Particulars Taka Particulars Taka

Ordinary Share Capital 2,00,000 Calls in Arrear 2,000
6% Preference Share Capital 3,00,000 Bad Debt 25,000
Bills Discounted 15,000
Deficiency Account (Balancing Figure) 3,26,100 Freehold Land 45,000
Plant & Machinery 30,000
Fixtures & Fittings 4,000
Stock in Trade 20,000
Patents 25,000
Receiver’s Fee (30,500 + 6,600) 37,100
Business Loss 6,23,000

8,26,300 8,26,100
 Workings:

As the Available amount to pay the Bank Overdraft and 50% of Unsecured Creditors is not Enough, we have to
perform the 100:50 test to make the distribution Schedule.

Bank Overdraft : 50% of Unsecured Creditors

= 20,000: 50% of 317,600
= 200 : 1,588
= 1,788

So, Payment from the Available 11,500 will be distributed as follows:

Bank Overdraft = (11,500 * 200) / 1,788

= 1,286

Unsecured Creditors = (11,500 * 1,588) / 1,788

= 10,214

NOTES:

1. Here Receiver’s fee on Cash in Hand has been considered to be included.

2. The maximum amount of salary can be 2000 tk for each employee and rest of the amount will be shown as
Unsecured creditors.
3. Recievers fee:
1st 10,00,000 – 10% ; 10,00,001- 2 core – 5% ; Above 2 core – 1%
For Selling any mortgage Assets – 4 % of the sale proceeds.