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g information, prepare as good form. my's most recent balance ets

g information, prepare as good form. my's most recent balance ets

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The Modesto Company is facing possible liquidation. Using the following information, prepare a statement of financial affairs in good form. Here's the company's most recent balance sheet Liabilities and equities Accounts payable Notes payable Assets Cash $12,000 $170,000 Accounts Receivable 60,000 120,000 90,000 Inventory Mortgage payable 80,000 Investments 45,000 Equipment 75,000 9,000 105,000 Common stock Land 82,000 Retained eamings Total assets $424,000 Total Liab. and Eq's $424,000 The mortgage payable is fully secured by the land. The land can be sold $104,000 immediately for The equipment partially secures the notes payable. The equipment is not in good shape and at auction will bring only $12,000 The market has declined so the investments have lost 40% of their value. It is estimated that 30% of the accounts receivable will have to be written off. The inventory is outdated and will bring only 50% of its book value at auction. Additional income taxes will be $15,000 Administrative expenses for bankruptcy are expected to total $20,000.
Transcribed Image Text:The Modesto Company is facing possible liquidation. Using the following information, prepare a statement of financial affairs in good form. Here's the company's most recent balance sheet Liabilities and equities Accounts payable Notes payable Assets Cash $12,000 $170,000 Accounts Receivable 60,000 120,000 90,000 Inventory Mortgage payable 80,000 Investments 45,000 Equipment 75,000 9,000 105,000 Common stock Land 82,000 Retained eamings Total assets $424,000 Total Liab. and Eq's $424,000 The mortgage payable is fully secured by the land. The land can be sold $104,000 immediately for The equipment partially secures the notes payable. The equipment is not in good shape and at auction will bring only $12,000 The market has declined so the investments have lost 40% of their value. It is estimated that 30% of the accounts receivable will have to be written off. The inventory is outdated and will bring only 50% of its book value at auction. Additional income taxes will be $15,000 Administrative expenses for bankruptcy are expected to total $20,000.
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