P15.5 Statement of Affairs despite satisfactory sales volume and profitability. Bridges cannot meet its working capital requirements for inventory and payments on current liabilities. Finally, after pledging all of its installment receivables for an additional loan, Bridges failed to meet the bills due on October 10,2020. Bridges' management believes that if the company could obtain an extension of time in which to pay its obligations, would be able to make all payments in full. Creditors want to know how much they would receive if the company liquidated. Bridges Fumiture Store is finding it increasingly difficult to meet its obligations The pre-closing trial balance for the current calendar year of the company on September 30, 2020, follows: Debit Credit $ 6,360 645,000 Installment receivables, pledged Allowance for doubtful installment receivables Accounts receivable Allowance for doubtful accounts Inventories, January 1, 2020 Prepaid insurance Autos and trucks Accumulated depreciation, autos and trucks Furniture and equipment Accumulated depreciation, furniture and equipment S 40,320 62,490 3,150 453,450 4.470 67.140 44,880 6,420 22,590 37,500 269,280 Accumulated depreciation, buildings 30,720 2,640 Organization costs Trade accounts payable Furniture and equipment loan payable. Installment loan on auto and trucks Bank loan, secured by installment receivables. Taxes payable (prior years) Accrued salaries and wages Accrued interest Notes payable, shareholders Mortgage payable, 6% Capital stock Retained earnings 396,300 17,400 30,000 483,750 42,660 14,040 32,970 300,000 147,000 300,000 195,870 2,126,700 Purchases. Other expenses and income, net Totals 1,582,890 650,370 $4,008,180 S4,008,180 Further nvestigation produced the following additional data: 1. Depreciation, allowances for doubtful accounts, prepaid and accrued items are all adjusted as of September 30. 2020 2. Ali installment rceivables are pledged with the bank on September 30. 2020. Bridges estimates th forced liquidation will result in a loss of S120.000 of the receivables face amount 3. Accounts receivable are not pl edged, and Bridges estimates collectibility of $49 500 on a liquidation basis 4. The inventory on hand will likely provide only $300,000 in a forced liquidation 5. Cancellation of the insurance will provide $2.970 6. All autos and trucks are pledged as security for an installment loan, and their total market value is $24,000, 7. The store was remodeled in 2019, and the furniture and equipment are financed by a loan; the fur niture and cequipment is pledged as security for the loan. Because of its specialized nature, Bridges estimates that a forced sale would realize no more than $15,000 8. The land and buildings are subject to a 6 percent mortgage, on which interest on the outstanding mortgage balance has been paid to July 30. 2020. It is estimated the property could be sold for $225,000 9. The acerued salaries and wages do not exceed statutory limits. 10. The notes payable to shareholders are unsecured and not subordinated to general creditors. Tle notes carry a 6 percent rate of interest. but no interest has been paid since December 3,2018(21 months). 11. Bridges estimates the cost of liquidation proceedings to be S15,000 Required a. Prepare b. Compute the percentages of recovery a statement of affairs for Bridges Furniture Store as of September 30, 2020 for each class of creditors if Bridges Furniture Store into bankruptey is forced P15.5 Statement of Affairs despite satisfactory sales volume and profitability. Bridges cannot meet its working capital requirements for inventory and payments on current liabilities. Finally, after pledging all of its installment receivables for an additional loan, Bridges failed to meet the bills due on October 10,2020. Bridges' management believes that if the company could obtain an extension of time in which to pay its obligations, would be able to make all payments in full. Creditors want to know how much they would receive if the company liquidated. Bridges Fumiture Store is finding it increasingly difficult to meet its obligations The pre-closing trial balance for the current calendar year of the company on September 30, 2020, follows: Debit Credit $ 6,360 645,000 Installment receivables, pledged Allowance for doubtful installment receivables Accounts receivable Allowance for doubtful accounts Inventories, January 1, 2020 Prepaid insurance Autos and trucks Accumulated depreciation, autos and trucks Furniture and equipment Accumulated depreciation, furniture and equipment S 40,320 62,490 3,150 453,450 4.470 67.140 44,880 6,420 22,590 37,500 269,280 Accumulated depreciation, buildings 30,720 2,640 Organization costs Trade accounts payable Furniture and equipment loan payable. Installment loan on auto and trucks Bank loan, secured by installment receivables. Taxes payable (prior years) Accrued salaries and wages Accrued interest Notes payable, shareholders Mortgage payable, 6% Capital stock Retained earnings 396,300 17,400 30,000 483,750 42,660 14,040 32,970 300,000 147,000 300,000 195,870 2,126,700 Purchases. Other expenses and income, net Totals 1,582,890 650,370 $4,008,180 S4,008,180 Further nvestigation produced the following additional data: 1. Depreciation, allowances for doubtful accounts, prepaid and accrued items are all adjusted as of September 30. 2020 2. Ali installment rceivables are pledged with the bank on September 30. 2020. Bridges estimates th forced liquidation will result in a loss of S120.000 of the receivables face amount 3. Accounts receivable are not pl edged, and Bridges estimates collectibility of $49 500 on a liquidation basis 4. The inventory on hand will likely provide only $300,000 in a forced liquidation 5. Cancellation of the insurance will provide $2.970 6. All autos and trucks are pledged as security for an installment loan, and their total market value is $24,000, 7. The store was remodeled in 2019, and the furniture and equipment are financed by a loan; the fur niture and cequipment is pledged as security for the loan. Because of its specialized nature, Bridges estimates that a forced sale would realize no more than $15,000 8. The land and buildings are subject to a 6 percent mortgage, on which interest on the outstanding mortgage balance has been paid to July 30. 2020. It is estimated the property could be sold for $225,000 9. The acerued salaries and wages do not exceed statutory limits. 10. The notes payable to shareholders are unsecured and not subordinated to general creditors. Tle notes carry a 6 percent rate of interest. but no interest has been paid since December 3,2018(21 months). 11. Bridges estimates the cost of liquidation proceedings to be S15,000 Required a. Prepare b. Compute the percentages of recovery a statement of affairs for Bridges Furniture Store as of September 30, 2020 for each class of creditors if Bridges Furniture Store into bankruptey is forced