Use the trial balance presented for Lynch, Inc , in problem 45 Assume that the company will be liquidated and the following transactions will occur Accounts receivable of $18,000 are collected with remainder written off All of the companys inventory is sold for $40,000 Additional accounts payable o...

a LYNCH INC Statement of Realization and Liquidation March 14 2010 to July 23 2010 Stock Liabilities ...

Use the trial balance presented for Lynch, Inc., in problem 45. Assume that the company will be

Question:

Use the trial balance presented for Lynch, Inc., in problem 45. Assume that the company will be liquidated and the following transactions will occur:
• of $18,000 are collected with remainder written off.
• All of the company’s inventory is sold for $40,000.
• Additional of $10,000 incurred for various expenses such as utilities and maintenance are discovered.
• The land and building are sold for $71,000.
• The note payable due to the Colorado Savings and Loan is paid.
• The equipment is sold at auction for only $11,000 with the proceeds applied to the note owed to the First National Bank.
• The investments are sold for $21,000.
• Administrative expenses total $20,000 as of July 23, 2011, but no payment has yet been made.
a. Prepare a statement of realization and for the period from March 14, 2011, through July 23, 2011.
b. How much cash would be paid to an unsecured, nonpriority creditor that Lynch, Inc., owes a total of $1,000?

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Liquidation
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due....