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) $ 13,000 86,000 130,000 121,000 321,000 222,000 $ 893,000 $ 140,000 292,000
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) $ 13,000 86,000 130,000 121,000 321,000 222,000 $ 893,000 $ 140,000 292,000
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 9PA: Noren Company uses the balance sheet aging method to account for uncollectible debt on receivables....
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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
13,000
86,000
130,000
121,000
321,000
222,000
$893,000
$
$ 140,000
292,000
211,000
141,000
109,000
$ 893,000
Additional Information
• If the company is liquidated, administrative expenses are estimated at $39,000.
• The accounts payable figure includes $31,000 in wages earned by the company's 12 employees during May. No one earned more
than $4,300.
• Liabilities do not include taxes of $35,000 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 $101,000. The land and buildings will be sold together for approximately $352,000; the equipment should bring
$151,000 at auction.
Prepare a statement of financial affairs for Limestone Company as of June 3, 2020.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fee246e18-2686-4f3b-bfb2-23125dafcffa%2F99289d3f-c296-4bf4-9e21-e9e139b5b3ad%2F1mobodm_processed.png&w=3840&q=75)
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
13,000
86,000
130,000
121,000
321,000
222,000
$893,000
$
$ 140,000
292,000
211,000
141,000
109,000
$ 893,000
Additional Information
• If the company is liquidated, administrative expenses are estimated at $39,000.
• The accounts payable figure includes $31,000 in wages earned by the company's 12 employees during May. No one earned more
than $4,300.
• Liabilities do not include taxes of $35,000 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 $101,000. The land and buildings will be sold together for approximately $352,000; the equipment should bring
$151,000 at auction.
Prepare a statement of financial affairs for Limestone Company as of June 3, 2020.
![Book
Values
LIMESTONE COMPANY
Statement of Financial Affairs
June 3, 2020
$ 442,000 Land and buildings
$ 893,000
Book
Values
Pledged with Fully Secured Creditors:
222,000 Equipment
$ 31,000
0
0
Assets
Less: Notes payable-long term
Pledged with Partially Secured Creditors:
13,000
86,000 Accounts receivable
130,000✔ Inventory
0
Less: Notes payable-current
Free Assets:
Cash
Total amount available to pay liabilities
with priority and unsecured creditors
Less: Liabilities with priority
Available for unsecured creditors
Estimated deficiency
Liabilities and Stockholders' Equity
Liabilities with Priority:
Administrative expenses
Salaries payable
Taxes payable
Total
Fully Secured Creditors:
211,000✔ Notes payable-long term
Less: Land and buildings
Partially Secured Creditors:
292,000✔ Notes payable current
Less: Equipment
Unsecured Creditors:
109,000✔ Accounts payable
250,000 Stockholders' equity
893,000
✓$ 352,000✔
✓
›› › › ›
✓
✓
✓
✓
› › ›
✓$
✓
››
››
✓
3
211,000 $ 141,000
151,000 ✓
292,000✔
39,000✔
31,000 ✓
35,000✔
$ 105,000
Available
for
Unsecured
Creditors
211,000✔
352,000✔
0
13,000✔
25,800✔
101,000✔
$280,800
(105,000)✓
$ 175,800
(53,200) X
122,600
Unsecured
Nonpriority
Liabilities
0✓
292,000✔
151,000 $ 141,000
109,000✔
0
0✓
250,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fee246e18-2686-4f3b-bfb2-23125dafcffa%2F99289d3f-c296-4bf4-9e21-e9e139b5b3ad%2Fpqmrgy6g_processed.png&w=3840&q=75)
Transcribed Image Text:Book
Values
LIMESTONE COMPANY
Statement of Financial Affairs
June 3, 2020
$ 442,000 Land and buildings
$ 893,000
Book
Values
Pledged with Fully Secured Creditors:
222,000 Equipment
$ 31,000
0
0
Assets
Less: Notes payable-long term
Pledged with Partially Secured Creditors:
13,000
86,000 Accounts receivable
130,000✔ Inventory
0
Less: Notes payable-current
Free Assets:
Cash
Total amount available to pay liabilities
with priority and unsecured creditors
Less: Liabilities with priority
Available for unsecured creditors
Estimated deficiency
Liabilities and Stockholders' Equity
Liabilities with Priority:
Administrative expenses
Salaries payable
Taxes payable
Total
Fully Secured Creditors:
211,000✔ Notes payable-long term
Less: Land and buildings
Partially Secured Creditors:
292,000✔ Notes payable current
Less: Equipment
Unsecured Creditors:
109,000✔ Accounts payable
250,000 Stockholders' equity
893,000
✓$ 352,000✔
✓
›› › › ›
✓
✓
✓
✓
› › ›
✓$
✓
››
››
✓
3
211,000 $ 141,000
151,000 ✓
292,000✔
39,000✔
31,000 ✓
35,000✔
$ 105,000
Available
for
Unsecured
Creditors
211,000✔
352,000✔
0
13,000✔
25,800✔
101,000✔
$280,800
(105,000)✓
$ 175,800
(53,200) X
122,600
Unsecured
Nonpriority
Liabilities
0✓
292,000✔
151,000 $ 141,000
109,000✔
0
0✓
250,000
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