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Required: Calculate the amount of cash that will be available to the stockholders if the accounts receivable are collected, the other assets are sold as described, and all liabilities and other claims are paid in full. Total cash available (including sale of assets) Total cash available to stockholders $ 0 0

Required: Calculate the amount of cash that will be available to the stockholders if the accounts receivable are collected, the other assets are sold as described, and all liabilities and other claims are paid in full. Total cash available (including sale of assets) Total cash available to stockholders $ 0 0

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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Kimber Company is in the process of liquidating and going out of business. The firm's accountant has provided the following balance sheet and additional information: Assets Canh Accounts receivable Merchandise inventory Total current assets Land Buildings and equipment Less: Accumulated depreciation Total land, buildings, and equipment Total assets Liabilities and Stockholders' Equity Accounts payable Notes payable Total current liabilities Long-term debt Total liabilities Stockholders' Equity: Common stock, no par Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 16,500 62,500 113,000 $ 51,000 345,000 (191,500) $ 48,500 55,500 $ 110,000 129,600 204,500 $ 396,500 $ 104,000 52,900 $156,900 239,600 $ 396,500 It is estimated that all but 19 percent of the accounts receivable can be collected, and that the merchandise inventory can be disposed of in a liquidation sale for 80 percent of its cost. Buildings and equipment can be sold at $60,000 above book value (the difference between original cost and accumulated depreciation shown on the balance sheet), and the land can be sold at its current appraisal value of $61,500. In addition to the liabilities included in the balance sheet, $2,210 is owed to employees for their work since the last pay period, and interest of $5,435 has accrued on notes payable and long-term debt.
Transcribed Image Text:Kimber Company is in the process of liquidating and going out of business. The firm's accountant has provided the following balance sheet and additional information: Assets Canh Accounts receivable Merchandise inventory Total current assets Land Buildings and equipment Less: Accumulated depreciation Total land, buildings, and equipment Total assets Liabilities and Stockholders' Equity Accounts payable Notes payable Total current liabilities Long-term debt Total liabilities Stockholders' Equity: Common stock, no par Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 16,500 62,500 113,000 $ 51,000 345,000 (191,500) $ 48,500 55,500 $ 110,000 129,600 204,500 $ 396,500 $ 104,000 52,900 $156,900 239,600 $ 396,500 It is estimated that all but 19 percent of the accounts receivable can be collected, and that the merchandise inventory can be disposed of in a liquidation sale for 80 percent of its cost. Buildings and equipment can be sold at $60,000 above book value (the difference between original cost and accumulated depreciation shown on the balance sheet), and the land can be sold at its current appraisal value of $61,500. In addition to the liabilities included in the balance sheet, $2,210 is owed to employees for their work since the last pay period, and interest of $5,435 has accrued on notes payable and long-term debt.
Required: Calculate the amount of cash that will be available to the stockholders if the accounts receivable are collected, the other assets are sold as described, and all liabilities and other claims are paid in full. Total cash available (including sale of assets) Total cash available to stockholders $ 0 0
Transcribed Image Text:Required: Calculate the amount of cash that will be available to the stockholders if the accounts receivable are collected, the other assets are sold as described, and all liabilities and other claims are paid in full. Total cash available (including sale of assets) Total cash available to stockholders $ 0 0
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