Hampton Company is trying to decide whether to seek liquidation or reorganization. Hampton has provided the following balance sheet:Hampton CompanyBalance SheetFebruary 23, 2018Current 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 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 $12,500. ? 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. Prepare a schedule to show the amount of assets available for unsecured creditors after payment of liabilities with priority.
What will be an ideal response?
| Assets available for unsecured creditors after payment of liabilities with priority: | |||
| Total assets available to pay liabilities with priority and unsecured creditors* | $ | 112,000 | |
| Liabilities with priority | (36,500 | ) | |
| Total | $ | 75,500 | |
? | |||
| ? | |||
| *Total assets available to pay liabilities with priority and unsecured creditors: | |||
| ? | |||
| Cash | $ | 1,000 | |
| Investments | 13,000 | ||
| Accounts receivable | 32,000 | ||
| Inventory | 6,000 | ||
| Equipment | 60,000 | ||
| Total | $ | 12,000 | |
You might also like to view...
Which of the following statements is most likely true regarding the objective-and-task method of budget setting?
A) It forces management to spell out its assumptions about the relationship between the money spent and promotion results. B) It is the simplest and least time consuming method to use. C) It is the least logical budget-setting method. D) It involves setting the promotion budget to match competitors' outlays. E) It wrongly views sales as the cause of promotion rather than as the result.
The doctrine of part performance allows the court to order an oral contract for the sale of land or transfer of another interest in real property to be specifically performed if performance is necessary to avoid injustice
Indicate whether the statement is true or false
The bill of lading is a document of title that is issued by a common carrier to the bailee when goods are received for transportation
Indicate whether the statement is true or false
An implied-in-fact contract is a contract in which agreement between parties has been inferred from their conduct.
Answer the following statement true (T) or false (F)