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The following balance sheet has been prepared by the accountant for Limestone Company as of June 3, 2020, the date on which the company is to file a voluntary petition of bankruptcy. Cash Accounts receivable (net) Inventory Land Buildings (net) Equipment (net) Total assets LIMESTONE COMPANY Balance Sheet June 3, 2020 Assets Liabilities and Equities Accounts payable. Notes payable-current (secured by equipment) Notes payable-long-term (secured by land and buildings) Common stock Retained earnings Total liabilities and equities $ 4,000 77,000 112,000 112,000 312,000 204,000 $ 821,000 $ 122,000 274,000 202,000 132,0 91,000 $ 821,000

The following balance sheet has been prepared by the accountant for Limestone Company as of June 3, 2020, the date on which the company is to file a voluntary petition of bankruptcy. Cash Accounts receivable (net) Inventory Land Buildings (net) Equipment (net) Total assets LIMESTONE COMPANY Balance Sheet June 3, 2020 Assets Liabilities and Equities Accounts payable. Notes payable-current (secured by equipment) Notes payable-long-term (secured by land and buildings) Common stock Retained earnings Total liabilities and equities $ 4,000 77,000 112,000 112,000 312,000 204,000 $ 821,000 $ 122,000 274,000 202,000 132,0 91,000 $ 821,000

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 following balance sheet has been prepared by the accountant for Limestone Company as of June 3, 2020, the date on which the company is to file a voluntary petition of bankruptcy: Cash Accounts receivable (net) Inventory Land Buildings (net) Equipment (net) Total assets LIMESTONE COMPANY Balance Sheet June 3, 2020 Assets Liabilities and Equities Accounts payable. Notes payable-current (secured by equipment) Notes payable-long-term (secured by land and buildings) Common stock Retained earnings Total liabilities and equities 4,000 77,000 112,000 112,000 312,000 204,000 $ 821,000 $ 122,000 274,000 202,000 132,000 91,000 $ 821,000 Additional Information If the company is liquidated, administrative expenses are estimated at $30,000. • The accounts payable figure includes $22,000 in wages earned by the company's 12 employees during May. No one earned more than $3,400. • Liabilities do not include taxes of $26,000 owed to the U.S. government. . Company officials estimate that 30 percent of the accounts receivable will be collected in a liquidation and that the inventory disposal will bring $92,000. The land and buildings will be sold together for approximately $334,000; the equipment should bring $142,000 at auction. Prepare a statement of financial affairs for Limestone Company as of June 3, 2020.
Transcribed Image Text:The following balance sheet has been prepared by the accountant for Limestone Company as of June 3, 2020, the date on which the company is to file a voluntary petition of bankruptcy: Cash Accounts receivable (net) Inventory Land Buildings (net) Equipment (net) Total assets LIMESTONE COMPANY Balance Sheet June 3, 2020 Assets Liabilities and Equities Accounts payable. Notes payable-current (secured by equipment) Notes payable-long-term (secured by land and buildings) Common stock Retained earnings Total liabilities and equities 4,000 77,000 112,000 112,000 312,000 204,000 $ 821,000 $ 122,000 274,000 202,000 132,000 91,000 $ 821,000 Additional Information If the company is liquidated, administrative expenses are estimated at $30,000. • The accounts payable figure includes $22,000 in wages earned by the company's 12 employees during May. No one earned more than $3,400. • Liabilities do not include taxes of $26,000 owed to the U.S. government. . Company officials estimate that 30 percent of the accounts receivable will be collected in a liquidation and that the inventory disposal will bring $92,000. The land and buildings will be sold together for approximately $334,000; the equipment should bring $142,000 at auction. Prepare a statement of financial affairs for Limestone Company as of June 3, 2020.
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