The Modesto Company is facing possible liquidation.
Using the following information, prepare a statement of
financial affairs in good form.
Here’s the company’s most recent balance sheet:
Assets Liabilities and equities
Cash $12,000 Accounts payable $170,000
Accounts Receivable 60,000 Notes payable 90,000
Inventory 120,000 Mortgage payable 80,000
Investments 45,000
Equipment 105,000 Common stock 75,000
Land 82,000 Retained earnings 9,000
Total assets $424,000 Total Liab. and Eq’s $424,000
The mortgage payable is fully secured by the land. The land can be sold
immediately for $103,000
The equipment partially secures the notes payable. The equipment is not in
good shape and at auction will bring only $30,000
The market has declined so the investments have lost 40% of their value.
It is estimated that 30% of the accounts receivable will have to be written off.
The inventory is outdated and will bring only 50% of its book value at
Additional income taxes will be $26,000
Administrative expenses for bankruptcy are expected to total $20,000.

Found something interesting ?

• On-time delivery guarantee
• PhD-level professional writers
• Free Plagiarism Report

• 100% money-back guarantee
• Absolute Privacy & Confidentiality
• High Quality custom-written papers

Related Model Questions

Feel free to peruse our college and university model questions. If any our our assignment tasks interests you, click to place your order. Every paper is written by our professional essay writers from scratch to avoid plagiarism. We guarantee highest quality of work besides delivering your paper on time.

Sales Offer

Coupon Code: SAVE25 to claim 25% special special discount