Reference no: EM132788159

A company enters bankruptcy proceedings. Its balance sheet, prepared using GAAP for a company with continuing operations, is as follows:

Cash                                 $ 15,000
Accounts payable                   $ 90,000
Inventories                              100,000
Loans payable                          300,000
Plant and equipment, net             250,000
Equity (deficit)                          (25,000)
Total                                        $365,000

The plant and equipment is security for one of the loans, with a balance of $130,000. The other liabilities are unsecured. The following transactions occur:

• Inventories with a book value of $60,000 were sold for $40,000.
• The plant and equipment was sold for $200,000. The loan secured by the plant and equipment was paid. 
• Wages and administrative expenses of $10,000 were accrued. 
• An initial payment of 40 cents per dollar of indebtedness was paid to the unsecured creditors.

Problem1 : On the receiver's balance sheet at the end of the period, total assets are:

A. $ 90,000 B. $ 40,000 C. $ 61,000 D. $111,000