Dominique Inc. has been experiencing some difficulties over the last three years, due to a downturn...

 

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Dominique Inc. has been experiencing some difficulties over the last three years, due to a downturn in the Barbadian market. The recent economic woes in Barbados have prompted the company to liquidate the business at the end of its financial year. The following balance sheet was prepared for Dominique Inc. as at November 30, 2013. Assets Notes receivable Accrued interest receivable Accounts receivable Allowance for doubtful accounts Inventories Land and buildings Plant and equipment Accumulated depreciation Liabilities and Equity 13,500 Bank overdraft 2,025 Notes payable 148,500 Accrued interest payable (20,250) Accounts payable 202,500 Accrued salaries payable 121,500 Common Stock ($10 par) 722,250 Additional paid in capital (452,250) Retained earnings (deficit) 737,775 e) All salaries qualify for priority f) Liquidation expenses are $4,500 Required 1. il. iii. iv. The following additional information should be taken into account: a) Notes receivable and accrued interest on those notes are expected to realize their book values 40,500 236,250 13,500 283,500 b) Accounts receivable are expected to realize $101,250. The accounts receivable have been pledged to secure a note payable for $67,500 and accrued interest expense of $5,400. c) Inventories will realize approximately 60% of their book value. d) A real estate agent believes that the land, buildings, plant and equipment could be sold for $337,500. The holder of a note payable of $155,250, with accrued interest thereon of $8,100 has a lien against the property for full amount due 56,025 540,000 60,750 Prepare a schedule of liquidation Compute the amount to be paid to each class of unsecured creditors (492,750) 737,775 Distinguish among fully secured, partially secured and unsecured claims of creditors. List five duties of a receiver in the receivership/liquidation process. Dominique Inc. has been experiencing some difficulties over the last three years, due to a downturn in the Barbadian market. The recent economic woes in Barbados have prompted the company to liquidate the business at the end of its financial year. The following balance sheet was prepared for Dominique Inc. as at November 30, 2013. Assets Notes receivable Accrued interest receivable Accounts receivable Allowance for doubtful accounts Inventories Land and buildings Plant and equipment Accumulated depreciation Liabilities and Equity 13,500 Bank overdraft 2,025 Notes payable 148,500 Accrued interest payable (20,250) Accounts payable 202,500 Accrued salaries payable 121,500 Common Stock ($10 par) 722,250 Additional paid in capital (452,250) Retained earnings (deficit) 737,775 e) All salaries qualify for priority f) Liquidation expenses are $4,500 Required 1. il. iii. iv. The following additional information should be taken into account: a) Notes receivable and accrued interest on those notes are expected to realize their book values 40,500 236,250 13,500 283,500 b) Accounts receivable are expected to realize $101,250. The accounts receivable have been pledged to secure a note payable for $67,500 and accrued interest expense of $5,400. c) Inventories will realize approximately 60% of their book value. d) A real estate agent believes that the land, buildings, plant and equipment could be sold for $337,500. The holder of a note payable of $155,250, with accrued interest thereon of $8,100 has a lien against the property for full amount due 56,025 540,000 60,750 Prepare a schedule of liquidation Compute the amount to be paid to each class of unsecured creditors (492,750) 737,775 Distinguish among fully secured, partially secured and unsecured claims of creditors. List five duties of a receiver in the receivership/liquidation process.

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I Schedule of Liquidation Notes Receivable 13500 Accrued Interest Receivable 2025 Accounts Receivabl... View the full answer