Comfort Mattress Corporation, a retailer, decided to liquidate in the face of an extreme cash shortage. By agreement with creditors, a receiver was appointed to manage the liquidation. Upon appointment, the receiver found the company's financial condition to be as follows:

From March 17 through June 30, the following occurred:
1. Collected accounts receivable of $80,000; the remaining accounts are deemed to be uncollectible.
2. Held a ''going out of business sale.'' Sold inventory costing $310,000 for $298,000. Paid expenses of conducting the sale, amounting to $75,000.
3. Sold the remaining inventory to a liquidator for $60,000.
4. The receiver terminated the store's lease; the lease provides for a termination penalty of $25,000, which was accrued.
5. Sold the store fixtures at auction for a net of $40,000.
6. Accrued the receiver's fee of $50,000.
7. Paid the secured creditors to the extent of the realized value of their security.
Required
a. Prepare a statement of realization and liquidation as of June 30, 2016.
Comfort Mattress Corporation
Statement of Realization and Liquidation
For the Period March 17 through June 30, 2016

b. Compute the remaining cash and determine how it is disbursed, assuming no further expenses.
Do not use any negative is ns with your answers below. Round answers to the nearest dollar, when appropriate.

Transcribed Image Text:

COMFORT MATTRESS CORPORATION Balance Sheet March 17, 2016 Accounts Payable Cash $15,000 $485,000 Accounts receivable Loan payable (secured by inventory) 120,000 225,000 Inventory of merchandise Notes payable (secured by fixtures) 500,000 60,000 Store fixtures, net Stockholders' equity 150,000 15,000 Total liabilities and equity Total assets S785,000 $785,000 Assets to be reallzed: Assets reallzed: Accounts receivable SAnswer Accounts receivable SAnswer Inventory Answer Inventory Answer Store fixtures Answer SAnswer Store Fixtures Answer SAnswer Assets acqulred: Assets not reallzed: None None Llablitles llquldated: Llablitles to be llquldated: Loan payable Answer Loan payable Answer Note payable Answer Answer Note payable Answer Accounts payable Answer Answer