The following balance sheet has been prepared by the accountant for Limestone Company as of June 3,

Question:

The following has been prepared by the accountant for Limestone Company as of June 3, 2013, the date on which the company is to file a voluntary petition of bankruptcy:
LIMESTONE COMPANY
Balance Sheet
3-Jun-13
Assets
Cash ......................... $3,000
Accounts Receivable (net) ............... $65,000
Inventory ....................... $88,000
Land ........................ $100,000
Buildings (net) ..................... $300,000
Equipment (net) .................... $180,000
Total assets ..................... $736,000
Liabilities and Equities
Accounts Payable ................... $98,000
Notes payable-current (secured by equipment) ....... $250,000
Notes payable-long term (secured by land and buildings) ... $190,000
Common stock .................... $120,000
Retained earnings ................... $78,000
Total liabilities and equities ............... $736,000

If the company is liquidated, administrative expenses are estimated at $18,000.
The figure includes $10,000 in wages earned by the company's 12 employees during May. No one earned more than $2,200.
Liabilities do not include taxes of $14,000 owed to the U.S. government.
Company officials estimate that 40 percent of the will be collected in a and that the inventory disposal will bring $80,000. The land and buildings will be sold together for approximately $310,000; the equipment should bring $130,000 at auction.

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