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A company preparing for a Chapter 7 liquidation has the following liabilities: Note payable A of...

A company preparing for a Chapter 7 liquidation has the following liabilities:

  • Note payable A of $140,000 secured by land having a book value of $75,000 and a fair value of $95,000.
  • Note payable B of $170,000 secured by a building having a $85,000 book value and a $65,000 fair value.
  • Note payable C of $85,000, unsecured.
  • Administrative expenses payable of $45,000.
  • Accounts payable of $145,000.
  • Income taxes payable of $55,000.

The company also has these other assets:

  • Cash of $35,000.
  • Inventory of $150,000 but with a net realizable value of $85,000.
  • Equipment of $140,000 but with a net realizable value of $75,000.

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