Question

Statement of Affairs Dellwood Corporation is experiencing difficulty in paying its bills and is considering filing...

Statement of Affairs Dellwood Corporation is experiencing difficulty in paying its bills and is considering filing for bankruptcy. Current data as of September 30, 2017, show the following:

Assets Expected Realizable Value
Cash $ 20,000
Accounts receivable 325,000
Inventory-materials 100,000
Inventory-finished goods 400,000
Land 200,000
Building 1,100,000
Trucks 45,000
Equipment 200,000
Liabilities Book Value Secured by
Accounts payable $ 800,000
Bank loan 275,000 80% of receivables
Wages payable 140,000
Taxes payable 75,000
Truck loan 70,000 Trucks with $30,000 estimated realizable value
Mortgage payable 600,000 Land and building
Loan payable 450,000 Finished goods
Note payable 750,000

All of the wages payable have priority.

Required

Prepare a statement of affairs.

Note: Do not use a negative sign in your answers.

Dellwood Corporation
Statement of Affairs
September 30, 2017
Estimated
Realizable Value
Free
Assets
Assets pledged to fully-secured creditors:
Land and building Answer
Less: Liabilities to fully-secured creditors Answer Answer
Assets pledged to partially-secured creditors:
Accounts recievable Answer
Inventory - finished goods Answer
Truck Answer
Answer
Free assets:
Cash Answer
Accounts receivable Answer
Inventory – materials Answer
Trucks Answer
Equipment Answer Answer
Total free assets Answer
Less: Unsecured liabilities with priority Answer
Net free assets Answer
Estimated deficiency to unsecured creditors Answer
Total unsecured liabilities Answer
Creditors'
Claims
Unsecured
Liabilities
Fully-secured creditors:
Mortgage payable Answer
Partially-secured creditors:
Bank Loan Answer
Loan payable Answer
Truck Loan Answer
Answer
Less: Value of pledged assets Answer Answer
Unsecured creditors with priority:
Wages payable Answer
Taxes payable Answer
Answer
Unsecured creditors:
Account payable Answer
Note payable Answer Answer
Total unsecured liabilities Answer
0 0
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Answer #1

Statement of affairs of Dellwood Corporation

Statement of Affairs Dellwood Corporation Statement of Affairs September 30 2017 Estimated Free Realizable Value Assets AssetCreditors Unsecured claim Liabilities Feelly - Secured creditors: Mortgage payable 600000 Partially - Secured creditors: Bank

Note:

1. Unsecured liabilities:-

Accounts payable = 800000

Bank loan(less secured part 260000) = 15000

Wages payable = 140000

Taxes payable = 75000

Truck loan(less secured part 30000) = 40000

Loan payable(less secured part 400000)= 50000

Notes payable = 750000

Total = 1870000

2. Estimated deficiency to unsecured creditors:-

Unsecured creditors= 1870000

Less: wages payable=140000

Taxes payable = 75000

Net free assets= 885000

Deficiency =770000

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