The following balance sheet has been prepared by the accountant for Limestone Company as of June 3, 2020, the date on which the company is to file a voluntary petition of bankruptcy:
| LIMESTONE COMPANY Balance Sheet June 3, 2020 |
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| Assets | ||
| Cash | $ | 8,000 |
| Accounts receivable (net) | 70,000 | |
| Inventory | 98,000 | |
| Land | 105,000 | |
| Buildings (net) | 305,000 | |
| Equipment (net) | 190,000 | |
| Total assets | $ | 776,000 |
| Liabilities and Equities | ||
| Accounts payable | $ | 108,000 |
| Notes payable—current (secured by equipment) | 260,000 | |
| Notes payable—long-term (secured by land and buildings) | 195,000 | |
| Common stock | 125,000 | |
| Retained earnings | 88,000 | |
| Total liabilities and equities | $ | 776,000 |
Additional Information
If the company is liquidated, administrative expenses are estimated at $23,000.
The accounts payable figure includes $15,000 in wages earned by the company's 12 employees during May. No one earned more than $2,700.
Liabilities do not include taxes of $19,000 owed to the U.S. government.
Company officials estimate that 45 percent of the accounts receivable will be collected in a liquidation and that the inventory disposal will bring $85,000. The land and buildings will be sold together for approximately $320,000; the equipment should bring $135,000 at auction.
Prepare a statement of financial affairs for Limestone Company as of June 3, 2020.
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