Question

Done newconnect.mheducation A c This webpage was reloaded because a problem occurred. Practice - Chapt... 0 Saved ve & Exit Submit Check my work 0.83 points Circle-Square Ltd. is in the process of liquidating and going out of business. The firm's balance sheet shows $22,860 in cash, accounts receivable of $111,200, inventory totaling $63,300, plant and equipment of $262.000, and total liabilities of $307,900. It is estimated that the inventory can be disposed of in a liquidation sale for 90 percent of its cost, all but 15 percent of the accounts receivable can be collected, and plant and equipment can be sold for $187,592. eBook Print References Required: Calculate the amount of cash that would be available to the owners if the accounts receivable are collected, the other assets are sold as described, and the liabilities are paid off in full. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.) Cash < Prev 1 of 6 Score answer >

Answer 1

Solution:-

	Cash	+	Accounts Receivable	+	Inventory	+	Plant & Equipment	=	Liabilities	+	Shareholders' Equity
Data Given	22,860	+	111,200	+	63,300	+	262,000	=	307,900	+	151,460
Collection of accounts Receivable	+94520		-111,200								-16,680
Inventory Liquidation	+56,970				-63,300						-6,330
Sale of plant & equipment	+187,592						-262,000				-74,408
Payment of liabilities	-307,900								-307,900
Balance	54,042	+	0	+	0	+	0	=	0	+	54,042

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