• Accounts receivable of $23,400 were collected.
• All of the company’s inventory was sold for $52,000.
• Additional accounts payable of $13,000 incurred for various expenses such as
utilities and maintenance were discovered.
• The land and building were sold for $92,300.
• The note payable due to the Idaho Savings and Loan was paid.
• The equipment was sold at auction for only $14,300 with the proceeds applied
to the note owed to the Second National Bank.
• The investments were sold for $27,300.
• Administrative expenses totaled $26,000 as of July 26, 2011, but no payment
had yet been made.
Required:
Prepare a
statement of realization and liquidation
for the period from March 15
through July 26, 2011.
73. Mount Inc. was a hardware store that operated in Boise, Idaho.
Management made some poor inventory acquisitions that loaded the store with
unsalable merchandise. Due to the decline in revenues, the company became
insolvent. Following is a trial balance as of March 15, 2011, the day the company
filed for Chapter 7 liquidation.
Company officials believed that sixty percent of the accounts receivable could be
collected if the company was liquidated. The building and land had a fair value of
$97,500, while the equipment was worth $24,700. The investments represented
shares of a publicly traded company that could be sold at the time for $27,300.
The entire inventory could be sold for only $42,900. Administrative expenses
necessary to carry out a liquidation would have approximated $20,800.
How much cash would have been paid to an unsecured non-priority creditor who
was owed a total of $1,300 by Mount Inc.? (Round the payout percentage to a
whole number.)
74. Hampton Company is trying to decide whether to seek liquidation or
reorganization. Hampton has provided the following balance sheet:
75. Hampton Company is trying to decide whether to seek liquidation or
reorganization. Hampton has provided the following balance sheet:
76. Hampton Company is trying to decide whether to seek liquidation or
reorganization. Hampton has provided the following balance sheet:
77. Hampton Company is trying to decide whether to seek liquidation or
reorganization. Hampton has provided the following balance sheet:
