The following balance sheet has been produced for Litz Corporation as of August 8, 2020, the date on which the company is to begin selling assets as part of a corporate liquidation:

The following events occur during the liquidation process:

• The investments are sold for $39,000.
• The inventory is sold at auction for $48,000.
• The money derived from the inventory is applied against the current notes payable.
• Administrative expenses of $15,000 are incurred in connection with the liquidation.
• The land and buildings are sold for $315,000. The long-term notes payable are paid.
• The accountant determines that $34,000 of the accounts payable are liabilities with priority.
• The company’s equipment is sold for $84,000.
• Accounts receivable of $34,000 are collected. The remainder of the receivables is considered uncollectible.
• The administrative expenses are paid.

a. Prepare a statement of realization and liquidation for the period just described.

b. What percentage of their claims should the unsecured creditors receive?

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LITZ CORPORATION Balance Sheet August 8, 2020 Assets $ 16,000 Cash Accounts receivable (net) 82,000 Investments 32,000 Inventory (net realizable value is expected to approximate cost). 69,000 Land.. 30,000 Buildings (net) 340,000 Equipment (net). 210,000 Total assets. $779,000 Liabilitles and Equities Accounts payable. Notes payable-current (secured by inventory) Notes payable-long term [secured by land and buildings (valued at $300,000)]. Common stock ... $150,000 132,000 259,000 135,000 Retained earnings.. 103,000 Total liabilities and equities $779,000