Advance accounting questions

Chapter 10: Exercises 10-6 and 10-9; Problems 10-6 and 10-7 EXERCISE 10-6 Settlement of Priority Claims The following data are taken from the statement of affairs of the Monroe Company. (Assume that the realizable values of assets are accurate.) Assets pledged with fully secured creditors (realizable value, $190,000) $240,000 Assets pledged with partially secured creditors (realizable value, $90,000) 110,000 Free assets (realizable value, $102,000) 160,000 Fully secured creditor claims 91,000 Partially secured creditor claims 120,000 Unsecured creditor claims with priority 30,000 General unsecured creditor claims 350,000 Required: Compute the amount that will be paid to each class of creditor. EXERCISE 10-9 Trustee Accounting TRX Company has been forced into receivership, and you have been appointed trustee. You decide to open your own set of books in order to distinguish more clearly between transactions occurring before and after your appointment. The following account balances were reported on September 1, 2009: Cash $ 26,700 Accounts Receivable 130,400 Inventory 191,900 Property and Equipment 590,400 Total $939,400 Allowance for Uncollectibles $ 16,000 Accumulated Depreciation 211,500 Accounts Payable 308,400 Capital Stock 800,000 Retained Earnings (deficit) (396,500) Total $939,400 In the four months immediately after your appointment, the following transaction occurred: 1. Sales were made in the amount of $296,000, of which $31,500 were cash sales. 2. Receivables were collected in the following amounts: Old receivables $ 76,800 New receivables 242,200 PROBLEM 10-6 Realization and Liquidation Account Use the data provided in Problem 10-5. PROBLEM 10-5 Trustee Accounting and Combining Workpaper Plum Company has been in receivership for the past five months. At the beginning of this period, the following trial balance was taken from Plum Company's books. Cash $ 4,500 Accounts Receivable 15,000 Inventory 142,650 Property and Equipment 90,600 $252,750 Allowance for Uncollectibles $ 3,750 Accumulated Depreciation 36,825 Accounts Payable 143,175 Capital Stock 135,000 Retained Earnings (deficit) (66,000) $252,750 The trustee, P. Smith, who was appointed to manage the debtor's business during the period of liquidation, opened a new set of books and took title to Plum Company's assets on June 1, 2009. The activities of the trustee during the five-month period ended October 31, 2009, are as follows: 1. The trustee sold all Plum Company's inventory for $153,000, of which $75,000 represented credit sales. 2. Cash was collected on old receivables, $11,250, and on new receivables, $64,500. 3. Expenses paid during the period were Operating expenses $11,850 Trustee expenses 3,000 4. The trustee recorded depreciation expense of $5,250. 5. The trustee paid off all the accounts payable. 6. Estimated uncollectibles on the new accounts receivable were $2,250; the trustee wrote off all the remaining old accounts receivable. 7. The trustee sold all the property and equipment for $43,500. Required: Prepare a realization and liquidation account for Plum Company to cover the five-month period of receivership (June 1, 2009, to October 31, 2009). Use the alternate approach to present the components of the net gain or net loss, and include a copy of the trustee's cash account for the period. PROBLEM 10-7 Statement of Affairs and Deficiency Account Miner Company is being forced into bankruptcy. The company's creditors and stockholders have requested an estimate of the results of a liquidation of the company. Miner's trial balance follows: Miner Company Trial Balance May 31, 2009 Debit Credit Cash $ 6,000 Accounts Receivable 63,000 Allowance for Bad Debts $ 2,000 Notes Receivable 50,000 Accrued Interest on Notes Receivable 1,200 Inventory 60,000 Buildings 182,000 Accumulated DepreciationBuildings 63,000 Equipment 14,600 Accumulated DepreciationEquipment 1,400 Prepaid Insurance 1,100 Goodwill 8,500 Accrued Wageswith Priority 6,000 Taxes Payablewith Priority 2,400 Accounts Payable 170,000 Notes Payable 80,000 Accrued Interest Payable 1,600 Common Stock 110,000 Retained Earnings (deficit) 50,000 $436,400 $436,400 The assets are expected to bring cash on conversion in the following amounts: Accounts receivable $50,000 Notes receivable including $1,000 accrued interest 40,800 Inventory 30,000 Building 75,000 Equipment 4,200 Prepaid insurance 400 The notes receivable are pledged as security on a note payable of $40,000. A note payable of $20,000 is secured by a lien on the building, and the equipment is pledged as security on a note payable of $10,000. One-half of the interest payable relates to the $40,000 note payable; the other half of the interest payable relates to the $20,000 note payable. There is no accrued interest on the other notes payable. Required: Prepare a statement of affairs as of May 31, 2009. Include a deficiency account, and determine the estimated dividend rate to the general unsecured creditors