Financial reporting during bankruptcy—Statement of affairs
Hanna Corporation filed a petition under the bankruptcy act on June 30, 2011. Data relevant to its financial position as of this date are:
|
Book Value |
Estimated Net Realizable Values |
|
|
Cash |
$ 2,200 |
$ 2,200 |
|
Accounts receivable—net |
15,000 |
13,500 |
|
Inventories |
20,000 |
22,500 |
|
Equipment—net |
55,000 |
28,000 |
|
Total assets |
$92,200 |
$66,200 |
|
Accounts payable |
$26,400 |
|
|
Rent payable |
7,600 |
|
|
Wages payable |
12,000 |
|
|
Note payable plus accrued interest |
31,000 |
|
|
Capital stock |
55,000 |
|
|
Retained earnings (deficit) |
(39,800 ) |
|
|
Total liabilities and equity |
$92,200 |
REQUIRED
1. Prepare a statement of affairs assuming that the note payable and interest are secured by a mortgage on the equipment and that wages are less than $4,000 per employee.
2. Estimate the amount that will be paid to each class of claims if priority liquidation expenses, including trustee fees, are $4,000 and estimated net realizable values are actually realized.