Kunda Ltd was incorporated with an authorized capital of Tshs 25,000,000/= Ordinary

shares of Tshs 5,000/= each. On 1st April 2008 when the winding up order was made, the
company had 30,000 of these shares in issue, Tshs 3,500/= per share called up. These
shares had been issued at a premium of Tshs 500/= per share. 200 of these shares are in
arrears in respect of first call of Shs 1,000/= per share. One share holder holding fifty of
these shares in arrear can not be traced

This company also had two classes of debenture in issue 9% Debenture of Tshs
50,000,000/= is secured on plant and Machinery appearing in the books at Tshs
70,000,000/= but expected to realize only Tshs 45,000,000/= and 6% Debenture of Tshs
25,000,000/= having floating charges on the current assets of the company. Stocks in
trade appearing in the books at this date at Tshs 61,400,000/= and debtor appearing in the
books at 46,300,000/= are only expected to realize Tshs 32,250,000/= and Tshs
28,100,000/= respectively. The company had a bank balance on this date of Tshs
1,600,000/=

Current liabilities of the company at these date is made up of the following

a) Trade creditor and None preferential accrued exp Tshs 54,700,000/=
b) 9% debenture interest Tshs 2,250,000/=
c) 6% debenture interest Tshs 1,500,000/=
d) Preferential creditors Tshs 19,100,000/=
e) Bank overdraft Tshs 26,200,000/=
The bank overdraft is secured on Motor vehicle appearing in the books at Tshs
42,000,000/= and expected to realize Tshs 45,000,000/=

Profit and loss account had a debit balance of Tshs 47,250,000/= on 31.3.2008
The records of operating result of the company is as follows
• Year ended 31st Dec 2005 Net profit Tshs 36,100,000/=
• Year ended 31st Dec 2006 Net loss Tshs 8,400,000/=
• Year ended 31 Dec 2007
st
Net loss Tshs 48,300,000/=
• Three month to 31 March 2008
st
Net loss Tshs 13,200000/=

The last Dividend declared by the company was 20% of called up capital declared in
respect of the year ended 31st Dec 2005. The only remaining assets appearing in the
books of the company is goodwill which is not realizable in winding up. Workers
compensation amounting to Shs 23,250,000/= will become payable on cessation of
business

Required: A statement of affair as at 1st April 2008 and a Deficiency Account for the
period from 1st January 2005 to the date of the winding up.