Lynch, Inc., is a hardware store operating in Boulder, Colorado.Management recently made some poor inventory acquisitions that haveloaded the store with unsalable merchandise. Because of the drop inrevenues, the
company is now insolvent. The following is a trialbalance as of March 14, 2020.
Assume that the
company will be liquidated and the followingtransactions will occur:
Prepare a
statement of realization and liquidation for theperiod from March 14, 2020, through July 23, 2020.
How much cash would be paid to an unsecured, nonprioritycreditor that Lynch, Inc., owes a total of $3,000?
- Lynch Inc Is A Hardware Store Operating In Boulder Colorado Management Recently Made Some Poor Inventory Acquisitio 1 (190.49 KiB) Viewed 10 times
Required A Required B Prepare a
statement of realization and liquidation for the period from March 14, 2020, through July 23, 2020. (Negative amounts should be indicated by a minus sign.) LYNCH, INC.
Statement of Realization and Liquidation March 14, 2020 to July 23, 2020 Book balances, 3/14/20 Accounts receivable collected-remaining balance assumed to be uncollectible Inventory sold Accounts payable discovered Land and buildings all sold Fully secured note paid Equipment sold Payment made on partially secured debt Investments sold Administrative expenses accrued Remaining partially secured claims reclassified as unsecured liabilities Final balances remaining for unsecured creditors < Cash $ 21,000 38,000 60,000 111,000 (90,000) 31,000 (31,000) 61,000 $ 201,000 Required A Noncash Assets $ 354,000 (65,000) (140,000) (77,000) X (42,000) X (30,000) X 0 Liabilities with Priority $ 46,000 $ 40,000 86,000 Required B > Fully Partially Unsecured Secured Secured Nonpriority Creditors Creditors Liabilities $ 90,000 $ 190,000 $ 60,000 $ (90,000) 0 (31,000) (159,000) $ 0 $ 30,000 159,000 249,000 Stockholders' Equity (Deficits) $ $ (11,000) X (27,000) (80,000) (30,000) 34,000 X 0 (11,000) X 0 31,000 (40,000) (134,000)
Required A Required B How much cash would be paid to an unsecured, nonpriority creditor that Lynch, Inc., owes a total of $3,000? (Round your final answer to nearest whole dollar amount.) Cash paid $ 519 X < Required A Required B >