On July 1, you were appointed receiver for the XYZ Company, which is in Chapter 7 bankruptcy. XYZ’s balance sheet on July 1 is as follows:

1. Assets		Liabilities and Equity
   Cash	$ 5,000	Loan payable	$170,000
   Accounts receivable	50,000	Note payable	40,000
   Merchandise	40,000	Equity (deficit)	(15,000)
   Equipment	100,000		______
   Total	$195,000	Total	$195,000

The note is secured by the equipment. All other liabilities are unsecured. During the next two months, you completed the following transactions:

1. Collected $45,000 on the accounts receivable.
2. The remainder are considered uncollectible.
3. Sold half the merchandise for $25,000.
4. The remaining merchandise is expected to yield $18,000.
5. Sold the equipment for $110,000.
6. Used the proceeds from the sale of the equipment to pay the note.
7. Accrued administrative expenses of $5,000.
8. Paid $140,000 on the loan.

Using a separate document – preferably a spreadsheet, prepare the statements listed below. Be sure to follow the file naming and formatting guidance presented.

1. Prepare a statement of realization and liquidation.

2. Prepare the statement of estate deficit.

3. Prepare the receiver’s balance sheet

Answer rating: 100% (QA)

1 Realization account Assets Liabilities Yield Merchandise 18000 Lo... View the full answer