13/5

please fix req. A and B

in 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. Following is a tr balance as of March 14, 2017 Debit Credit $ 37,000 $ 33,000 54,000 20,000 12,000 8,000 84,000 5,000 62,00 Accounts payable Accounts receivable Accumulated depreciation, building Accumulated depreciation, equipment Additional paid-in capital Advertising payable Building Cash Common stock Equipment Inventory Investments Land Note Payable-Colorado Savings and Loan (secured by tien on land and building) Note Payable-First National Bank (secured by equipment) Payroll taxes payable Retained earnings (deficit) Salaries payable (owed equally to two employees) Totals 42,000 108,000 19,000 14,000 74,000 158,000 5,000 134,000 $439,000 9,000 $ 439,000 Assume that the company will be liquidated and the following transactions will occur. Accounts receivable of $22,000 are collected with remainder written off. All of the company's inventory is sold for $44,000. Additional accounts payable of $14,000 incurred for various expenses such as utilities and maintenance are discovered. The land and building are sold for $79,000. The note payable due to the Colorado Savings and Loan is paid. The equipment is sold at auction for only $15,000 with the proceeds applied to the note owed to the First National Bank The investments are sold for $29.000 Administrative expenses total $24,000 as of July 23, 2017, but no payment has yet been made.