Bottomless Pit Inc. files a voluntary petition for bankruptcy on May 1, 200X which
includes the following assets and liabilities:
	Carrying	Realizable
	Amount	Amount
Assets
Cash	$2,000	$2,000
Accounts receivable	66,000	20,000
Inventory	6,000	3,000
Building	80,000	130,000
Equipment	36,000	10,000
Total Assets	$190,000	$165,000
Liabilities
Salaries payable	$5,000
Taxes payable	10,000
Accounts payable	80,000
Loan payable	115,000	secured by building
Liquidation costs payable	5,000
	$215,000
Prepare a Statement of Affairs and a Schedule of Estimated Amounts to be
Recovered by Creditors as of May 1, 200X.
On May 1, 200X the Bankruptcy Court appointed you as trustee to administer the assets
and liquidate the company. Show the journal entries transferring the assets and liabilities
to you and for the following transactions for the month of May 200X:
A. Sold the building for $120,000 and paid the loan.
B. Collected $10,000 from the accounts receivable. Remainder is uncollectible
C. Sold the equipment for $8,000
D. Paid the salaries and taxes payable.
E. Sold all remaining inventory for $8,000
F. Paid liquidation costs.
G. Distributed settlement to remaining creditors
Prepare a Statement of Realization and Liquidation for Bottomless Pit for the month of
May 200X.