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 total assets available to pay liabilities with priority and unsecured creditors.
What will be an ideal response?
| 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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