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Mount Incorporated 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, 2024, the day the company filed for Chapter 7 liquidation: General Journal Debit Accounts payable Accounts receivable Accumulated depreciation-Building Accumulated depreciation-Equipment Additional paid-in capital Advertising payable Building Cash Common stock Credit $ 42,900 $ 32,500 65,000 20,800 10,400 5,200 104,000 1,300 65,000 Equipment Inventory 39,000 130,000 Investments Land 19,500 13,000 Note payable-Idaho Savings and Loan (secured by a lien on land and building) Note Payable-Second National Bank (secured by equipment) 91,000 195,000 Payroll taxes payable 1,300 Retained earnings (deficit) 163,800 Salaries payable (split equally between two employees) Totals 6,500 $ 503,100 $ 503,100 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 were estimated to be $20,800. Required: How much cash would have been paid to an unsecured non-priority creditor who was owed a total of $1,300 by Mount Incorporated? Note: Round the payout percentage to a whole number.

Mount Incorporated 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, 2024, the day the company filed for Chapter 7 liquidation: General Journal Debit Accounts payable Accounts receivable Accumulated depreciation-Building Accumulated depreciation-Equipment Additional paid-in capital Advertising payable Building Cash Common stock Credit $ 42,900 $ 32,500 65,000 20,800 10,400 5,200 104,000 1,300 65,000 Equipment Inventory 39,000 130,000 Investments Land 19,500 13,000 Note payable-Idaho Savings and Loan (secured by a lien on land and building) Note Payable-Second National Bank (secured by equipment) 91,000 195,000 Payroll taxes payable 1,300 Retained earnings (deficit) 163,800 Salaries payable (split equally between two employees) Totals 6,500 $ 503,100 $ 503,100 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 were estimated to be $20,800. Required: How much cash would have been paid to an unsecured non-priority creditor who was owed a total of $1,300 by Mount Incorporated? Note: Round the payout percentage to a whole number.

Century 21 Accounting General Journal
Century 21 Accounting General Journal
11th Edition
ISBN:9781337680059
Author:Gilbertson
Publisher:Gilbertson
Chapter20: Accounting For Inventory
Section: Chapter Questions
Problem 1CP
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Mount Incorporated 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, 2024, the day the company filed for Chapter 7 liquidation: General Journal Debit Accounts payable Accounts receivable Accumulated depreciation-Building Accumulated depreciation-Equipment Additional paid-in capital Advertising payable Building Cash Common stock Credit $ 42,900 $ 32,500 65,000 20,800 10,400 5,200 104,000 1,300 65,000 Equipment Inventory 39,000 130,000 Investments Land 19,500 13,000 Note payable-Idaho Savings and Loan (secured by a lien on land and building) Note Payable-Second National Bank (secured by equipment) 91,000 195,000 Payroll taxes payable 1,300 Retained earnings (deficit) 163,800 Salaries payable (split equally between two employees) Totals 6,500 $ 503,100 $ 503,100 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 were estimated to be $20,800. Required: How much cash would have been paid to an unsecured non-priority creditor who was owed a total of $1,300 by Mount Incorporated? Note: Round the payout percentage to a whole number.
Transcribed Image Text:Mount Incorporated 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, 2024, the day the company filed for Chapter 7 liquidation: General Journal Debit Accounts payable Accounts receivable Accumulated depreciation-Building Accumulated depreciation-Equipment Additional paid-in capital Advertising payable Building Cash Common stock Credit $ 42,900 $ 32,500 65,000 20,800 10,400 5,200 104,000 1,300 65,000 Equipment Inventory 39,000 130,000 Investments Land 19,500 13,000 Note payable-Idaho Savings and Loan (secured by a lien on land and building) Note Payable-Second National Bank (secured by equipment) 91,000 195,000 Payroll taxes payable 1,300 Retained earnings (deficit) 163,800 Salaries payable (split equally between two employees) Totals 6,500 $ 503,100 $ 503,100 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 were estimated to be $20,800. Required: How much cash would have been paid to an unsecured non-priority creditor who was owed a total of $1,300 by Mount Incorporated? Note: Round the payout percentage to a whole number.
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