Problem 1: Answer questions related to a liquidation and realization statement with the following information of Johnson Inc.:

Balance Sheet as on Dec 31, 2016:

Assets

Cash. $9,000

Accounts receivable (30,000 - 7,500) 22,500

Inventory 285,300

Property & Equipment (181,200 - 73,650) 107,550

Owners Equity

Capital Stock 270,000

Retained earnings (deficit). (132,000)

Note: Assume that there are no liabilities in this problem.

The trustee who is appointed for liquidation, provided the following additional information:

1. The trustee sold all of Johnsons inventory for $306,000 of which $150,000 represented credit sales.
2. Cash collected on old receivables: $ 22,500, and on new receivables: $64,500.
3. Trustee expenses paid during liquidation: $ 29,700
4. The trustee recorded depreciation expense of $5,250.
5. Estimated uncollectibles on new receivables are $4,500, the trustee wrote off all the remaining accounts receivables.
6. The trustee sold off all the property and equipment for $87,000.

1. (Problem 1 related) The total of the LHS of the statement after all necessary information is put in it will be

1. $599,550
2. $668,700
3. $698,700
4. $595,050

1. (Problem 1 related) The list of assets that will be reported under assets NOT sold will also include:

1. New receivables, net of estimated uncollectibles, of $0
2. New receivables, net of estimated uncollectibles, of $85,500
3. New receivables, net of estimated uncollectibles, of $4,500
4. New receivables, net of estimated uncollectibles, of $81,000

1. (Problem 1 related) The list of assets that will be reported under assets NOT sold will also include:

1. New receivables, net of estimated uncollectibles, of $0
2. New receivables, net of estimated uncollectibles, of $85,500
3. New receivables, net of estimated uncollectibles, of $4,500
4. New receivables, net of estimated uncollectibles, of $81,000

1. The following assets will be reported under New Assets:

1. Receivables of $85,500
2. Inventory of $285,300
3. Receivables of $150,000
4. Inventory of $306,000