Warwick Company is trying to decide whether to seek liquidation or reorganization. Warwick has provided the following balance sheet:

Warwick Company
Balance Sheet
February 13, 2019
Current Assets:
Cash	$	1,000
Investments		28,000
Accounts receivable		46,500
Inventory		72,000
Prepaid expenses		4,200			$	151,700
Plant & Equipment
Land	$	65,000
Building		180,000
Equipment		75,300				320,300
Intangibles						78,000
Total assets					$	550,000
Current Liabilities:
Accounts payable	$	127,000
Accrued expenses		99,000
Notes payable (secured by inventory)		68,000			$	294,000
Long-term Liabilities
Notes payable (secured by land and building)						300,000
Stockholders Equity
Common stock	$	100,000
Retained earnings (deficit)		(144,000	)			(44,000	)
Total Liabilities and Stockholders Equity					$	550,000

Additional information to answer question 6 is as follows:

• The investments are currently worth $13,000.
• It is estimated that $32,000 of the accounts receivable are collectible.
• The inventory can be sold for $74,000.
• The prepaid expenses and the intangible assets have no net realizable value.
• The land and building are currently valued at $250,000.
• The equipment can be sold for $60,000.
• Administrative expenses (not yet recorded) are estimated to be $15,500.
• Accrued expenses include $17,000 of salaries payable ($11,000 to one employee and $3,000 each to two other employees).
• Accrued expenses include $7,000 of unpaid payroll taxes.

REQUIREMENT: Prepare a Statement of Financial Affairs.