Use the trial balance presented for Lynch, Inc., in problem (51). Assume that the company will be

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Use the trial balance presented for Lynch, Inc., in problem (51). Assume that the company will be liquidated and the following transactions will occur:

In problem (51)

Use the trial balance presented for Lynch, Inc., in problem

∙ Accounts receivable of $18,000 are collected with remainder written off.
∙ All of the company's inventory is sold for $40,000.
∙ Additional accounts payable of $10,000 incurred for various expenses such as utilities and maintenance are discovered.
∙ The land and building are sold for $71,000.
∙ The note payable due to the Colorado Savings and Loan is paid.
∙ The equipment is sold at auction for only $11,000 with the proceeds applied to the note owed to the First National Bank.
∙ The investments are sold for $21,000.
∙ Administrative expenses total $20,000 as of July 23, 2017, but no payment has yet been made.
a. Prepare a statement of realization and liquidation for the period from March 14, 2017, through July 23, 2017.
b. How much cash would be paid to an unsecured, nonpriority creditor that Lynch, Inc., owes a total of $1,000?

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Liquidation
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due....
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Advanced Accounting

ISBN: 978-1259444951

13th edition

Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni

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