Deficiency to Unsecured Creditors

Consider the following information for Evans, Inc. when the company entered bankruptcy proceedings:

Account Balance per Books

Dr $($Cr$)$

Cash $$30,500$

Accounts receivable $600,000$

Inventory $100,000$

Prepaid expenses $14,200$

Buildings, net $800,000$

Equipment, net $125,000$

Goodwill $100,000$

Wages payable $(80,000)$

Taxes payable $(45,000)$

Accounts payable $(980,000)$

Notes payable $(305,000)$

Common stock $(800,000)$

Retained earnings$$deficit $440,300$

Total $$0$

Inventory with a realizable value of $$35,000$ is security for notes payable of $$50,000.$ The buildings secure the remaining notes payable. Expected realizable values of the assets are:

Accounts receivable $$400,000$

Inventory $150,000$

Buildings $340,000$

Equipment $75,000$

The prepaid expenses and goodwill have a realizable value of zero. The entire wages and taxes payable balances are priority liabilities.

Required

Compute the estimated deficiency to unsecured creditors.

Do not use negative signs with any of your answers below.

Assets pledged to fully$-$secured creditors Answer

$35,000$

Less: Liabilities to fully$-$secured creditors Answer

$0$

Available as free assets Answer

Unpledged assets Answer

$0$

Less: Unsecured liabilities with priority Answer

$125000$

Net free assets Answer

$0$

Liabilities to partially$-$secured creditors Answer

$50000$

Less: Assets pledged to partially$-$secured creditors Answer

$35000$

Unsecured portion Answer

$15000$

Unsecured liabilities Answer

$980000$

Total unsecured liabilities Answer

$995000$

Estimated deficiency to unsecured creditors Answer

$0$