Question
: Mark Corporation is in trusteeship under chapter 7 of bankruptcy. Following is the balance sheet at the start of June in which bankruptcy case
: Mark Corporation is in trusteeship under chapter 7 of bankruptcy. Following is the balance sheet at the start of June in which bankruptcy case was windup.
MARK CORPORATION IN TRUSTEESHIP BALANCE SHEET ON MAY 31, 2018 | |
Assets |
|
Cash | $42,000 |
Marketable securities | 8,900 |
Accounts receivablenet | 29,000 |
Prepaid expenses | 4,500 |
Total assets | $84,400 |
Liabilities and Deficit |
|
Accounts payable | $65,000 |
Trustees fee payablenew | 3,000 |
Note payablebank | 16,000 |
Notes payablesuppliers | 7,000 |
Total liabilities | 91,000 |
Less: Estate deficit | 6,600 |
Total liabilities less deficit | $84,400 |
Required: Journalize the following transaction to windup liquidation case. (10 Marks)
During June 2018, the trustee for Mark Corporation:
- Collected the $27,900 accounts receivable remaining were wrote off.
- Sold the marketable securities for $8,300
- Sold supplies (included in prepaid expenses) for $4,000. Remaining were wrote off.
- The trustees fee is paid in full.
- Distributed cash in final liquidation of the estate and trustee is dismissed.
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