A partially completed statement of realization and liquidation is as follows: The following additional transactions have occurred
Question:
The following additional transactions have occurred through August 12, 2019:
a. Receivables collected amounted to $39,000. Receivables with a book value of $15,000 that were not allowed for were written off.
b. A $12,000 loan that was fully secured was paid off.
c. A valid claim was received from a leasing company seeking payment of $15,000 for equipment rentals.
d. Securities costing $18,000 were sold for $23,000, minus a brokerage fee of $500.
e. Depreciation on machinery was $3,200.
f. Payments on accounts payable totaled $25,000, of which the entire amount was secured by the inventory sold.
g. Machinery that originally cost $85,000 and had a book value of $45,000 sold for $36,000.
h. Proceeds from the sale of machinery in (g) were remitted to the bank, which holds a $50,000 loan on the machinery.
1. Update the statement of realization and liquidation to properly reflect transactions (a) through (h).
2. Assuming the remaining noncash assets can be realized for $410,000, determine the estimated dividend to be received by unsecured creditors without priority.
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Step by Step Answer:
Advanced Accounting
ISBN: 978-0538480284
11th edition
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng