Question

In: Accounting

The following balance sheet has been prepared by the accountant for Limestone Company as of June...

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 $ 12,000
Accounts receivable (net) 74,000
Inventory 106,000
Land 109,000
Buildings (net) 309,000
Equipment (net) 198,000
Total assets $ 808,000
Liabilities and Equities
Accounts payable $ 116,000
Notes payable—current (secured by equipment) 268,000
Notes payable—long term (secured by land and buildings) 199,000
Common stock 129,000
Retained earnings 96,000
Total liabilities and equities $ 808,000

Additional Information

  • If the company is liquidated, administrative expenses are estimated at $27,000.
  • The accounts payable figure includes $19,000 in wages earned by the company's 12 employees during May. No one earned more than $3,100.
  • Liabilities do not include taxes of $23,000 owed to the U.S. government.
  • Company officials estimate that 35 percent of the accounts receivable will be collected in a liquidation and that the inventory disposal will bring $89,000. The land and buildings will be sold together for approximately $328,000; the equipment should bring $139,000 at auction.

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

Solutions

Expert Solution

  • LIMESTONE COMPANY
    Statement of Finacial Affairs
    3-Jun-17
    Book Value Assets Available for Unsecured Creditors
    Pledged with Fully Secured Creditors:
       418,000.00 Land & Buildings     328,000.00
    Less: Notes Payable Long term (199,000.00)            129,000.00
    Pledged with Partially Secured Creditors:
       198,000.00 Equipment     139,000.00
    Less: Notes Payable - Current (268,000.00)                              -  
    Free Assets:
    12,000.00 Cash 12,000.00
    74,000.00 Accounts Receivables               25,900.00
    106,000.00 Inventory               89,000.00
    Total amount available to pay liabilities with priority and unsecured creditors            255,900.00
    Less: Liabilities with priority
       (listed below)    		            (69,000.00)
    Available for Unsecured Creditors            186,900.00
    Estimated Deficiency 39,100
    808,000.00            226,000.00
    Book Value Liabilities and Stockholders' Equity Unsecured - Nonpriority Liabilities
    Liabilities with Priority:
    Administrative Expenses        27,000.00
         19,000.00 Salaries Payable        19,000.00
    Taxes Payable 23,000.00
    Total 69,000.00
    Fully Secured Creditors:
       199,000.00 Notes Payable - Long Term     199,000.00
    Less: Land & Buildings (328,000.00)                              -  
    Partially Secured Creditors:
       268,000.00 Notes Payable Current     268,000.00
    Less: Equipment (139,000.00)            129,000.00
    Unsecured Creditors:
         97,000.00 Accounts Payable (Other than Salaries)               97,000.00
       225,000.00 Stockholders' Equity                              -  
    808,000.00            226,000.00

IF ANY DOUBT PLEASE MENTION IN COMMENT

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant....
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant. In reviewing the statement you notice several errors. LOS GATOS CORPORATION Balance Sheet At December 31, 2018 Assets Cash $ 78,000 Accounts receivable 137,000 Inventories 74,000 Machinery (net) 139,000 Franchise (net) 49,000 Total assets $ 477,000 Liabilities and Shareholders’ Equity Accounts payable $ 88,000 Allowance for uncollectible accounts 24,000 Note payable 93,000 Bonds payable 129,000 Shareholders’ equity 143,000 Total liabilities and shareholders’ equity $...
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant....
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant. In reviewing the statement you notice several errors. LOS GATOS CORPORATION Balance Sheet At December 31, 2021 Assets Cash $ 78,000 Accounts receivable 137,000 Inventory 74,000 Machinery (net) 139,000 Franchise (net) 49,000 Total assets $ 477,000 Liabilities and Shareholders’ Equity Accounts payable $ 88,000 Allowance for uncollectible accounts 24,000 Notes payable 93,000 Bonds payable 129,000 Shareholders’ equity 143,000 Total liabilities and shareholders’ equity $...
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant....
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant. In reviewing the statement you notice several errors. LOS GATOS CORPORATION Balance Sheet At December 31, 2018 Assets Cash $ 74,000 Accounts receivable 131,000 Inventories 72,000 Machinery (net) 137,000 Franchise (net) 47,000 Total assets $ 461,000 Liabilities and Shareholders’ Equity Accounts payable $ 84,000 Allowance for uncollectible accounts 22,000 Note payable 89,000 Bonds payable 127,000 Shareholders’ equity 139,000 Total liabilities and shareholders’ equity $...
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant....
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant. In reviewing the statement you notice several errors. LOS GATOS CORPORATION Balance Sheet At December 31, 2018 Assets Cash $ 72,000 Accounts receivable 128,000 Inventories 71,000 Machinery (net) 136,000 Franchise (net) 46,000 Total assets $ 453,000 Liabilities and Shareholders’ Equity Accounts payable $ 82,000 Allowance for uncollectible accounts 21,000 Note payable 87,000 Bonds payable 126,000 Shareholders’ equity 137,000 Total liabilities and shareholders’ equity $...
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant....
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant. In reviewing the statement you notice several errors. LOS GATOS CORPORATION Balance Sheet At December 31, 2018 Assets Cash $ 70,000 Accounts receivable 125,000 Inventories 70,000 Machinery (net) 135,000 Franchise (net) 45,000 Total assets $ 445,000 Liabilities and Shareholders’ Equity Accounts payable $ 80,000 Allowance for uncollectible accounts 20,000 Note payable 85,000 Bonds payable 125,000 Shareholders’ equity 135,000 Total liabilities and shareholders’ equity $...
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant....
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant. In reviewing the statement you notice several errors. LOS GATOS CORPORATION Balance Sheet At December 31, 2018 Assets Cash $ 48,000 Accounts receivable 92,000 Inventories 59,000 Machinery (net) 124,000 Franchise (net) 34,000 Total assets $ 357,000 Liabilities and Shareholders’ Equity Accounts payable $ 58,000 Allowance for uncollectible accounts 9,000 Note payable 63,000 Bonds payable 114,000 Shareholders’ equity 113,000 Total liabilities and shareholders’ equity $...
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant....
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant. In reviewing the statement you notice several errors. LOS GATOS CORPORATION Balance Sheet At December 31, 2018 Assets Cash $ 48,000 Accounts receivable 92,000 Inventories 59,000 Machinery (net) 124,000 Franchise (net) 34,000 Total assets $ 357,000 Liabilities and Shareholders’ Equity Accounts payable $ 58,000 Allowance for uncollectible accounts 9,000 Note payable 63,000 Bonds payable 114,000 Shareholders’ equity 113,000 Total liabilities and shareholders’ equity $...
The following balance sheet, which has some weaknesses in terminology and classification, has been prepared by...
The following balance sheet, which has some weaknesses in terminology and classification, has been prepared by an inexperienced accountant and submitted to you for review: Mikeska Company Balance Sheet as of December 31, 2017 ($ in thousands) Assets Fixed assets—tangible Land $ 500 Buildings and equipment 200 Less: Reserve for depreciation (50 ) $ 650 Factory supplies 20 Current assets Inventory 163 Accounts receivable 102 Cash 68 333 Fixed assets—intangibles Patents 51 Goodwill 49 100 Deferred charges Discount on bonds...
Corrections to Balance Sheet Minett Boatbuilders Company prepared the following balance sheet: Minett Boatbuilders Company Balance...
Corrections to Balance Sheet Minett Boatbuilders Company prepared the following balance sheet: Minett Boatbuilders Company Balance Sheet for Year Ended December 31, 2019 Working capital $ 22,800 Noncurrent liabilities $ 62,000 Other assets 152,000 Shareholders' equity 112,800 Total $174,800 Total $174,800 Your analysis of these accounts reveals the following information: 1. Working capital consists of: Land $ 12,000 Accounts due from customers 18,000 Accounts due to suppliers (22,700) Inventories, including office supplies of $3,500 35,500 Income taxes owed (16,400) Wages...
The following balance sheet for the Hubbard Corporation was prepared by the company: HUBBARD CORPORATION Balance...
The following balance sheet for the Hubbard Corporation was prepared by the company: HUBBARD CORPORATION Balance Sheet At December 31, 2021 Assets Buildings $ 752,000 Land 256,000 Cash 62,000 Accounts receivable (net) 124,000 Inventory 244,000 Machinery 282,000 Patent (net) 102,000 Investment in equity securities 64,000 Total assets $ 1,886,000 Liabilities and Shareholders' Equity Accounts payable $ 217,000 Accumulated depreciation 257,000 Notes payable 504,000 Appreciation of inventory 82,000 Common stock (authorized and issued 102,000 shares of no par stock) 408,000 Retained...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT