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Lynch, Inc., is a hardware store operating in Boulder, Colorado, Management recently made some poor inventory acquisitions that have loaded the store with unsalable merchandise. Because of the drop in revenues, the company is now insolvent. The entire inventory can be sold for only $36,700. Following is a trial balance as of March 14, 2017, the day the company files for a Chapter 7 liquidation: Debit Credit Accounts payable $ 36,700 Accounts receivable $ 28,488 Accumulated depreciation, building 50,900 Accumulated depreciation, equipment 19,800 Additional paid-in capital 8,530 Advertising payable 4,290 Building 83,900 Cash 1,250 Common stock 51,588 Equipment 33,000 Inventory 126,000 Investments 16, 600 Land 13,500 Note Payable-Colorado Savings and Loan (secured by lien on land and building) 73,500 Note Payable-First National Bank (secured by equipment) 199,000 Payroll taxes payable 1,220 Retained earnings (deficit) 148, eee Salaries payable (owed equally to two employees) 5,210 Totals $450,650 $ 450,65 Company officials believe that 60 percent of the accounts receivable can be collected if the company is liquidated. The building and land have a fair value of $78,300, and the equipment is worth $21,400. The investments represent shares of a nationally traded company that can be sold at the current time for $22,100. Administrative expenses necessary to carry out a liquidation would approximate $18,300 Prepare a statement of financial affairs for Lynch, Inc., as of March 14, 2017 Answer is not complete. LYNCH, INC LYNCH, INC. Statement of Financial Affairs March 14, 2017 Book Values Assets Available for Unsecured Creditors $ 0 Pledged with Fully Secured Creditors: Land and building Less: Notes payable Pledged with Partially Secured Creditors: Equipment Less: Notes payable Free Assets: Cash Accounts receivable Inventory Investments $ 0 Total available to pay liabilities with priority and unsecured creditors Less: Liabilities with priority Available for unsecured creditors Estimated deficiency $ 0 $ 0 $ 0 Book Values Liabilities and Stockholders' Equity Unsecured Nonpriority Liabilities Liabilities with Priority Administrative expenses Salaries payable DOC Accounts receivable Inventory Investments 0 Total available to pay liabilities with priority and unsecured creditors Less: Liabilities with priority Available for unsecured creditors Estimated deficiency 0 0 0 Book Values Liabilities and Stockholders' Equity Unsecured Nonpriority Liabilities Liabilities with Priority: Administrative expenses Salaries payable Payroll taxes payable $ 0 Total Fully Secured Creditors: Notes payable Less: Land and building Partially Secured Creditors: Notes payable Less: Equipment Unsecured Creditors: Accounts payable Advertising payable $ 0 Stockholders' equity $ 0 $ 0