Question
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.
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. The following is a trial balance as of March 14, 2020.
Debit Credit Accounts payable $ 56,000 Accounts receivable $ 71,000 Accumulated depreciation, building 73,000 Accumulated depreciation, equipment 39,000 Additional paid-in capital 31,000 Advertising payable 27,000 Building 103,000 Cash 24,000 Common stock 119,000 Equipment 99,000 Inventory 146,000 Investments 38,000 Land 33,000 Note PayableColorado Savings and Loan (secured by lien on land and building) 93,000 Note PayableFirst National Bank (secured by equipment) 196,000 Payroll taxes payable 24,000 Retained earnings (deficit) 172,000 Salaries payable (owed equally to two employees) 28,000 Totals $ 686,000 $ 686,000
Assume that the company will be liquidated and the following transactions will occur:
Accounts receivable of $41,000 are collected with remainder written off. All of the company's inventory is sold for $63,000. Additional accounts payable of $33,000 incurred for various expenses, such as utilities and maintenance, are discovered. The land and building are sold for $117,000. The note payable due to the Colorado Savings and Loan is paid. The equipment is sold at auction for only $34,000 with the proceeds applied to the note owed to the First National Bank. The investments are sold for $67,000. Administrative expenses total $43,000 as of July 23, 2020, but no payment has been made yet.
Prepare a statement of realization and liquidation for the period from March 14, 2020, through July 23, 2020.
How much cash would be paid to an unsecured, nonpriority creditor that Lynch, Inc., owes a total of $6,000?
Can you show step by step how to calculate those in?? Help
Fully Secured Creditors Partially Unsecured Stockholders Secured Nonpriority Equity Creditors Liabilities (Deficits) LYNCH, INC. Statement of Realization and Liquidation March 14, 2017 to July 23, 2017 Noncash Liabilities Cash with Assets Priority Book balances, 3/14/17 $ 4,000 Accounts receivable collected remaining balance assumed to be uncollectible Inventory sold Accounts payable discovered Land and buildings all sold Fully secured note paid Equipment sold Payment made on partially secured debt Investments sold Required A. Required B How much cash would be paid to an unsecured, nonpriority creditor that Lynch, Inc., owes a total of $6,000? (Round your final answer to nearest whole dollar amount.) Cash paid
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