The following balance sheet has been prepared by the accountant
Question # 00146870
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Updated on: 12/06/2015 02:23 AM Due on: 01/05/2016
The following balance sheet has been prepared by the accountant for Limestone Company as of June 3, 2011, the date on which the company is to file a voluntary petition of bankruptcy:
Limestone Company
Balance Sheet
June 3, 2011
Assets
Cash $3,000
Accounts receivable 65,000
Inventory 88,000
Land 100,000
Buildings (net) 300,000
Equipment (net) 180,000
Total Assets $736,000
Liabilities and Equities
Accounts Payable $98,000
Notes payable – current
(secured by equipment) 250,000
Notes payable –long term
(secured by land and buildings) 190,000
Common Stock 120,000
Retained Earnings 78,000
Total Liabilities and equities $736,000
Additional Information:
• If the company is liquidated, administrative expense are estimates at $18,000
• The accounts Payable figure includes $10,000 in wages earned by the company’s 12 employees during May. No one earned more than $2,200.
• Liabilities do not include taxes of $14,000 owed to the U.S. Government
• Company officials estimate that 40 percent of the accounts receivable will be collected in liquidation and that the inventory disposal will bring $80,000. The land and buildings will be sold together for approximately $310,000; the equipment should bring $130,000 at auction.
Prepare a statement of financial affairs for Limestone Company as of June 3, 2011.
Limestone Company
Balance Sheet
June 3, 2011
Assets
Cash $3,000
Accounts receivable 65,000
Inventory 88,000
Land 100,000
Buildings (net) 300,000
Equipment (net) 180,000
Total Assets $736,000
Liabilities and Equities
Accounts Payable $98,000
Notes payable – current
(secured by equipment) 250,000
Notes payable –long term
(secured by land and buildings) 190,000
Common Stock 120,000
Retained Earnings 78,000
Total Liabilities and equities $736,000
Additional Information:
• If the company is liquidated, administrative expense are estimates at $18,000
• The accounts Payable figure includes $10,000 in wages earned by the company’s 12 employees during May. No one earned more than $2,200.
• Liabilities do not include taxes of $14,000 owed to the U.S. Government
• Company officials estimate that 40 percent of the accounts receivable will be collected in liquidation and that the inventory disposal will bring $80,000. The land and buildings will be sold together for approximately $310,000; the equipment should bring $130,000 at auction.
Prepare a statement of financial affairs for Limestone Company as of June 3, 2011.
39. (Prepare a statement of financial affairs)
LIMESTONE COMPANY
Statement of Financial Affairs
June 3, 2008
Available
for
Book
Values
$400,000
180,000
3,000
65,000
88,000
$736,000
Assets
Pledged with Fully Secured Creditors:
Land and buildings
$310,000
Less: Notes payable-long-term
(190,000)
Unsecured
Creditors
Pledged with Partially Secured Creditors:
Equipment
$130,000
Notes payable—current
(250,000)
Free Assets:
Cash ................................................................
Accounts receivable ......................................
Inventory .........................................................
Total amount available to pay liabilities
with priority and unsecured creditors......
Less: Liabilities with priority
(listed below)..............................................
Available for unsecured creditors .................
Estimated deficiency.......................................
$208,000
Unsecured
—
Book
Values
Liabilities and Stockholders' Equity
$ 10,000
Liabilities with Priority:
Administrative expenses ................$ 18,000
Salaries payable ............................... 10,000
Taxes payable ................................... 14,000
Total .................................................. $ 42,000
190,000
Fully Secured Creditors:
Notes payable - long-term ............... $190,000
Less: Land and buildings ................(310,000)
250,000
Nonpriority
Liabilities
Partially Secured Creditors:
Notes payable current ..................... $250,000
Less: Equipment............................... (130,000)
88,000
198,000
$736,000
Unsecured Creators:
Accounts payable (other than salaries)
Stockholders' equity.......................................
$208,000
LIMESTONE COMPANY
Statement of Financial Affairs
June 3, 2008
Available
for
Book
Values
$400,000
180,000
3,000
65,000
88,000
$736,000
Assets
Pledged with Fully Secured Creditors:
Land and buildings
$310,000
Less: Notes payable-long-term
(190,000)
Unsecured
Creditors
Pledged with Partially Secured Creditors:
Equipment
$130,000
Notes payable—current
(250,000)
Free Assets:
Cash ................................................................
Accounts receivable ......................................
Inventory .........................................................
Total amount available to pay liabilities
with priority and unsecured creditors......
Less: Liabilities with priority
(listed below)..............................................
Available for unsecured creditors .................
Estimated deficiency.......................................
$208,000
Unsecured
—
Book
Values
Liabilities and Stockholders' Equity
$ 10,000
Liabilities with Priority:
Administrative expenses ................$ 18,000
Salaries payable ............................... 10,000
Taxes payable ................................... 14,000
Total .................................................. $ 42,000
190,000
Fully Secured Creditors:
Notes payable - long-term ............... $190,000
Less: Land and buildings ................(310,000)
250,000
Nonpriority
Liabilities
Partially Secured Creditors:
Notes payable current ..................... $250,000
Less: Equipment............................... (130,000)
88,000
198,000
$736,000
Unsecured Creators:
Accounts payable (other than salaries)
Stockholders' equity.......................................
$208,000
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Rating:
/5
Solution: The following balance sheet has been prepared by the accountant