Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik

Exercise 10

The following balance sheet has been prepared by the accountant for Limestone Company as of June 3, 2011, the date on which the company is to file a voluntary petition of bankruptcy:
Additional Information
• If the company is liquidated, administrative expenses are estimated at $18,000.
• The Accounts Payable figure includes $10,000 in wages earned by the company's 12 employees during May.No one earned more than $2,200.
• Liabilities do not include taxes of $14,000 owed to the U.S.government.
• Company officials estimate that 40 percent of the accounts receivable will be collected in a liquidation and that the inventory disposal will bring $80,000.The land and buildings will be sold together for approximately $310,000; the equipment should bring $130,000 at auction.Prepare a statement of financial affairs for Limestone Company as of June 3, 2011.