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 


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