Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Kimber Co. is in the process of liquidating and going out of business. The firm's accountant has provided the following balance sheet and additional information:

image text in transcribed
image text in transcribed
Kimber Co. is in the process of liquidating and going out of business. The firm's accountant has provided the following balance sheet and additional information: 3 30,000 90,000 150,000 $ 270,000 $50,000 400.000 (129,000 330,000 600,000 Assets Cash Accounts receivable Merchandise inventory Total current assets Land Buildings & equipment Less: Accumulated depreciation Total land, buildings, upent Total assets Llabilities and stockholdere Equity Accounts payable totes payable Total corrent liabilities Long term debt Total Labilities Stockholders Equity Common stock Retained earnings Total stockholders equity Total liabilities and stockholders uity $10,000 120. $ 199,000 $320.00 $100,000 100.000 20.00 500,000 It is estimated that all but 20 percent of the accounts receivable can be collected and that the merchandise inventory can be disposed of in a liquidation sale for 70 percent of its cost Buildings and equipment can be sold of $60,000 above book value the diference between orginal cost and accumulated depreciation shown on the balance sheet), and the land can be sold at its current appraisal value of $85,000. In addition to the abilities included in the balance sheet $5.000 sowed to employees for their work since the last pay period, and interest of $10,000 has accrued on notes payable and long term debt It is estimated that all but 20 percent of the accounts receivable can be collected, and that the merchandise inventory can be disposed of in a liquidation sale for 70 percent of its cost Buildings and equipment can be sold at $60,000 above book value (the difference between original cost and accumulated depreciation shown on the balance sheet), and the land can be sold at its current appraisal value of $85,000. In addition to the abilities included in the balance sheet. $5,000 is owed to employees for their work since the last pay period, and interest of $10,000 has accrued on notes payable and long-term det Required: 6. Calculate the amount of cash that will be walloble to the stockholdets if the accounts receivable are collected, the other assets are sold as described, and all liabilities and other claims are paid in full Totul bash available including sale of assets) 0 S Total cash vadable to stockholders

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions