Chapter 13, Problem 45P

The following balance sheet has been prepared by the accountant for Limestone Company as of June 3, 2017, the date on which the company is to file a voluntary petition of bankruptcy:

LIMESTONE COMPANY Balance Sheet June 3, 2017 Assets
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$ 3,000
Accounts receivable (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	65,000
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	88,000
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	100,000
Buildings (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	300,000
Equipment (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	180,000
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$736,000
Liabilities and Equities
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$ 98,000
Notes payable—current
(secured by equipment) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	250,000
Notes payable—long term
(secured by land and buildings) . . . . . . . . . . . . . . . . . . . . . . . . . . .	190,000
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	120,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	78,000
Total liabilities and equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$736,000

Additional Information

• If the company is liquidated, administrative expenses are estimated at $18,000.
• The accounts payable figure includes $10,000 in wages earned by the company’s 12 employees during May. No one earned more than $2,200.
• Liabilities do not include taxes of $14,000 owed to the U.S. government.
• Company officials estimate that 40 percent of the accounts receivable will be collected in a liquidation and that the inventory disposal will bring $80,000. The land and buildings will be sold together for approximately $310,000; the equipment should bring $130,000 at auction.

Prepare a statement of financial affairs for Limestone Company as of June 3, 2017.