Prepare a statement of affairs as of may

Assignment Help Accounting Basics
Reference no: EM131883219

Question 1 - Settlement of Priority Claims

The following data are taken from the statement of affairs of the Monroe Company. (Assume that the realizable values of assets are accurate.)

Assets pledged with fully secured creditors (realizable value, $190,000) $240,000

Assets pledged with partially secured creditors (realizable value, $90,000) 110,000

Free assets (realizable value, $102,000) 160,000

Fully secured creditor claims 91,000

Partially secured creditor claims 120,000

Unsecured creditor claims with priority 30,000

General unsecured creditor claims 350,000

Required: Compute the amount that will be paid to each class of creditor.

Question 2 - Trustee Accounting

TRX Company has been forced into receivership, and you have been appointed trustee. You decide to open your own set of books in order to distinguish more clearly between trans-actions occurring before and after your appointment. The following account balances were reported on September 1, 2009:

Cash $ 26,700

Accounts Receivable 130,400

Inventory 191,900

Property and Equipment 590,400

Total $939,400

Allowance for Uncollectibles $ 16,000

Accumulated Depreciation 211,500

Accounts Payable 308,400

Capital Stock 800,000

Retained Earnings (deficit) (396,500)

Total $939,400

In the four months immediately after your appointment, the following transaction occurred:

1. Sales were made in the amount of $296,000, of which $31,500 were cash sales.

2. Receivables were collected in the following amounts:

Old receivables $ 76,800

New receivables 242,200

Question 3 - Trustee Accounting and Combining Workpaper

Plum Company has been in receivership for the past five months. At the beginning of this period, the following trial balance was taken from Plum Company's books.

Cash $ 4,500

Accounts Receivable 15,000

Inventory 142,650

Property and Equipment 90,600

$252,750

Allowance for Uncollectibles $ 3,750

Accumulated Depreciation 36,825

Accounts Payable 143,175

Capital Stock 135,000

Retained Earnings (deficit) (66,000)

$252,750

The trustee, P. Smith, who was appointed to manage the debtor's business during the period of liquidation, opened a new set of books and took title to Plum Company's assets on June 1, 2009. The activities of the trustee during the five-month period ended October 31, 2009, are as follows:

1. The trustee sold all Plum Company's inventory for $153,000, of which $75,000 represented credit sales.

2. Cash was collected on old receivables, $11,250, and on new receivables, $64,500.

3. Expenses paid during the period were

Operating expenses $11,850

Trustee expenses 3,000

4. The trustee recorded depreciation expense of $5,250.

5. The trustee paid off all the accounts payable.

6. Estimated uncollectibles on the new accounts receivable were $2,250; the trustee wrote off all the remaining old accounts receivable.

7. The trustee sold all the property and equipment for $43,500.

Required: Prepare a realization and liquidation account for Plum Company to cover the five-month period of receivership (June 1, 2009, to October 31, 2009). Use the alternate approach to present the components of the net gain or net loss, and include a copy of the trustee's cash account for the period.

Question 4 - Statement of Affairs and Deficiency Account

Miner Company is being forced into bankruptcy. The company's creditors and stockholders have requested an estimate of the results of a liquidation of the company. Miner's trial balance follows:

Miner Company Trial Balance

May 31, 2009

Debit Credit

Cash $ 6,000

Accounts Receivable 63,000

Allowance for Bad Debts $ 2,000

Notes Receivable 50,000

Accrued Interest on Notes Receivable 1,200

Inventory 60,000

Buildings 182,000

Accumulated Depreciation-Buildings 63,000

Equipment 14,600

Accumulated Depreciation-Equipment 1,400

Prepaid Insurance 1,100

Goodwill 8,500

Accrued Wages-with Priority 6,000

Taxes Payable-with Priority 2,400

Accounts Payable 170,000

Notes Payable 80,000

Accrued Interest Payable 1,600

Common Stock 110,000

Retained Earnings (deficit) 50,000

$436,400 $436,400

The assets are expected to bring cash on conversion in the following amounts:

Accounts receivable $50,000

Notes receivable including $1,000 accrued interest 40,800

Inventory 30,000

Building 75,000

Equipment 4,200

Prepaid insurance 400

The notes receivable are pledged as security on a note payable of $40,000. A note payable of $20,000 is secured by a lien on the building, and the equipment is pledged as security on a note payable of $10,000. One-half of the interest payable relates to the $40,000 note payable; the other half of the interest payable relates to the $20,000 note payable. There is no accrued interest on the other notes payable.

Required: Prepare a statement of affairs as of May 31, 2009. Include a deficiency account, and determine the estimated dividend rate to the general unsecured creditors.

Reference no: EM131883219

Questions Cloud

Lot of pressure for her daughter to do well : In "Two Kinds" the mother put a lot of pressure for her daughter to do well. This can be referred to as her "putting all her eggs in one basket".
Discuss how you might develop the information system : Discuss how you might develop the information system that your company needs to successfully launch and grow. Be sure to include security issues/concerns.
Write a program to find second largest number in an array : Write a program in Java to find the second largest number in an array?
Gastroesophageal reflux disease : She is examined by the emergency room doctor and diagnosed with Gastroesophageal Reflux Disease (GERD). The doctor has ordered medication
Prepare a statement of affairs as of may : Prepare a statement of affairs as of May 31, 2009. Include a deficiency account, and determine the estimated dividend rate to the general unsecured creditors
Front page story about recent induction : It's 2046 and the New York Times is writing a front page story about your recent induction into the HSF Alumni Hall of Fame. What might the story say?
Write code to check whether given number is armstrong or not : Problem- Write a program to check whether the given number is an Armstrong or Not?
What cash flows does it promise if payments are annual : What cash flows does it promise if payments are annual? If the bond is priced to yield 4%, how much does it cost?
Roadblocks to recognizing and preventing bias : How would you prevent this from happening, depending on the research method you are using? What are the possible roadblocks to recognizing and preventing bias?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd