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P18-5 Financial reporting during bankruptcy The unsecured creditors of Dan filed a petition under Chapter 7 of the bankruptcy act on July 1, 2016, to force Dan into bankruptcy. The court order for relief was granted on July 10, at which time an interim trustee was appointed to supervise liquidation of the estate. A listing of assets and liabilities of Dan as of July 10, 2016, along with estimated realizable values, is as follows: Book Estimated Values Realizable Values Assets Cash $80,000 $80,000 Accounts receivable-net 210,000 160,000 Inventories . 200,000 210,000 Equipment-net 150.000 60,000 Land and buildings nel 250.000 140.000 Intangible assets 10.00 S200.000 $650,000 Accounts payable $400.000 Nole payable 100.000 Wapes payable (from June and July) 24,000 Taxes payable 76,000 Mortgage payable $200,000, plus $5,000 unpaid interest to July 10 205,000 Capital stock 300,000 Retained earnings delicit (205.00) SXKD ONO ADDITIONAL INFORMATION unpaid interest to July 10 Capital stock Retained earnings deficit 205,000 300,000 (205,000) $200,000 ADDITIONAL INFORMATION 1. Accounts receivable are pledged as security for the note payable 2 No more than $1,000 is owed to any employed. 624 CHAPTER 18 3. Taxes payable is a priority item. 4. Inventory items include 550,000 acquired on July 5, 2016, the unpaid invoice is included in accounts rayable. 5. The mortgage payable and interest are secured by the land and buildings 6. Trustee fees and other costs of liquidating the estate are expected to be $11,000 REQUIRED 1. Prepare a statement of affairs for Dan on July 10, 2016 2. Develop a schedule showing how available cash will be distributed to each class or claims, assuming that (a) the estimated realizable values are actually received and (b) the trustee and other fees of liquidating the estate are SI1OXXO P18-6 Financial vertinante

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