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:
June 3, 2020
|Accounts receivable (net)||70,000|
|Liabilities and Equities|
|Notes payable—current (secured by equipment)||260,000|
|Notes payable—long-term (secured by land and buildings)||195,000|
|Total liabilities and equities||$||776,000|
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.