P18-6 Financial reporting during bankruptcy The balance sheet of Val at June 30, 2016, contains the following items:

Assets Cash $40,000 Accounts receivable—net 70,000 Inventories 50,000 Land 30,000 Building—net 200,000 Machinery—net 60,000 Goodwill 50,000

$500,000 Equities Accounts payable $110,000 Wages payable 60,000 Property taxes payable 10,000 Mortgage payable 150,000 Interest on mortgage payable 15,000 Note payable—unsecured 50,000 Interest payable—unsecured 5,000 Capital stock 200,000 Retained earnings deficit (100,000)

$500,000