Professional Documents
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Adv Acc Jwab
Adv Acc Jwab
Cam Corp. experienced a large operating loss in 2011 and the first half of 2012. By July 2012 its account payable were overdue, and its accoun
had been pledged to support a bank loan that was in default. Cam creditors were unwilling to extend additional credit or to ammend the terms
their loans, and on August 1, 2012 Cam filed a voluntary pettion for bankruptcy. The following balance sheet was prepared at the filing bankcr
On 1 August 2012 Cam corporation was transferred to the Cam Cor
CAM CORPORATION BALANCE SHEET, AUGUST 1, 2012
Assets
The following transactions occur during the month of August:
Cash
3000
1. Unrecorded utility bill for $500 is received.
Marketable securities(at market)
7000
2. Intangible assets are written off.
Account Receivable-net amount
25000
3. All inventory items are sold for $48000 of which $18000 is still on accoun
Inventories
50000
4. The equipment is sold for $14200 cash
Prepaid expenses
4000
89000
5. Wages and property taxes owed are paid
Land
15000
6. Land and Building are sold for $64000 cash, and the mortgage payable a
Building-net
40000
paid
Equipment-net
30000
7. Insurance policies included in prepaid expenses are canceled, and $1000
Intangible Assets
6000
91000
8. Account Receivable of $21000 are colllected and the remaining $4000 is
Total Assets
180000
cash received is applied to pay the bank note and related interest.
Liabilities and Stockholders' Equity
9. Estate adminstration fees of $3000 are paid.
Account payable
65000
10. Trustee fees of $2000 are acrued.
Wages payable
13000
During September 2012:
Property taxes payable
2000
1. The trustee collected the $18000 account receivable.
Notes payable-bank
25000
2. Marketable securities are sold for $7300, Supplies included in Prepaid ac
Notes payable- suppliers
5000
the remaining Prepaid account are written off.
Interest payable
7000
117000 Upon liquidation, the trustee's fee is paid in full. The remaining cash i
Mortage payable
50000 liabilities according to payment priorities and the ratio of their remain
Total Liabilities
167000 Instructions:
Stockholders' Equity
a. Prepare the journal entries to transfer the Cam Corp. to the Trustee book.
Capital Stock (100000 shares)
200,000
b. Prepare Statement of Affair on August1 1, 2012.
Retained Earnings
-187000
c. Prepare all the journal entries for August 2012 transactions.
Total stockholders' equity
13000
d. Prepare the statement of Cash Receipts/Disbursements, Balance sheet, S
Total Liabilities & Stockholders' Equity
180000
in estate equity, Statement of Realization and Liquidation for the mo
e. Prepare the journal entries for the month of September 2012.
Note: Mortgage is secured by Land Buidings as collateral.
f. Prepare the journal entries to close Cam Corporation.
Partially secured creditors are Notes from Bank. Priority Payable
nsactions.
ments, Balance sheet, Statement of Changes
Liquidation for the month of August, 2012.
mber 2012.
65000
13000
2000
25000
5000
7000
50000
200000
367000
Cash
Marketable securities(at market)
Account Receivable-net amount
Inventories
Prepaid expenses
Land
Building-net
Equipment-net
Intangible Assets
Retained earnings
3000
7000
25000
50000
4000
15000
40000
30000
6000
187000
367000
22000
25000
2000
27000
creditors
Less: priority liabilities
total available for unsecured creditors
Estimated deficiency
180000
Liabilities and Stockholder's equity
Secured and
Priority Claims
Book Value
Fully Secured Creditors
50000 Mortgage payable
5000 Interest payable
50000
5000
25000
2000
27000
22000
13000
2000
15000
Unsecured creditors
65000 Accounts payable
5000 Notes payable to suppliers
Stockholder's Equity
200000 Capital stock
-187000 Retained earnings
180000
18000
7000
300
3000
Closed :
Accounts payable
Utilities payable
Note payablebank
Notes payablesuppliers
Estate equity
, 2012
mated Realizable
ue less secured
ditor liabilities
Estimated realizable
value available for
unsecured creditors
5000
3000
7000
55000
0
12000
0
3000
7000
25000
50000
4000
15000
40000
30000
6000
180000
65000
13000
2000
25000
5000
7000
50000
13000
180000
suppliers
82000
15000
67000
8000
75000
Unsecured
Nonpriority claims
5000
65000
5000
75000
11050
85
1020
850
13005
500
500
6000
6000
Cash
Account receivable
Estate equity
Inventory
30000
18000
2000
Cash
Estate equity
Equipment
14200
15800
Wages payable
Property taxes payable
Cash
13000
2000
Cash
Land
Building
Estate equity
Mortgage payable
Interest payable
Cash
50000
Cash
Prepaid expenses
30000
Cash
Estate equity
Accounts receivable
Estate equity
Cash
15000
Estate equity
Trustee's fee payable
Balance,August 1, 2012
Inventory items sold
Equipment sold
Land and building sold
Insurance refund
Accounts receivable
Balance, August 31, 2012
11300
BALANCE SHEET
ON AUGUST 31,2012
Assets
Cash
Marketable securities
Accounts receivablenet
Prepaid expenses
Total assets
Liabilities and Deficit
Accounts payable
Utilities payablediscovered
Trustees fee payablenew
Note payablebank (unsecured portion)
Notes payablesuppliers
Total liabilities
Less: Estate deficit
Total liabilities less deficit
39,200
7,000
18,000
3,000
67,200
65,000
500
2,000
6,000
5,000
78,500
11,300
67,200
Notes payablesuppliers
Interest payable
Mortgage payable
Liabilities Incurred or Discovered
[Amounts incurred or discovered
but unpaid at August 31]
Liability discovered for utilities
Trustees fee payablenew
5,000
7,000
50,000
Mortgage payable
167000
64000
15000
40000
9000
50000
5000
(kapa 5rbu?)
55000
1000
1000
21000
4000
25000
3000
3000
2000
2000
15000
55000
21000
3000
39200
133200
est payment
13000
9000
11300
33300
ATION
12
148200
7,000
3,000
18,000
28000
d [Noncash assets at
d [Amounts paid
13,000
2,000
19,000
7,000
50,000
91000
dated [Liabilities
65000
6000
5000
500
2000
78500
ms
venues [Revenues
24300
370000
Estate equity
Utilities Payable
Estate equity
Intangible assets
500
500