Question

Jaez Corporation is in the process of going through a reorganization. As of December 31, 2017, the company's accountant has determined the following information although the company is still several months away from emerging from the bankruptcy proceeding. Book Value Fair Value Assets Cash Inventory Land Buildings Equipment $ 43,000 65,000 200,000 240,000 174,000 $ 43,000 67,000 260,000 280,000 177,000 Allowed Claims Expected Settlement $ Liabilities as of the date of the order for relief Accounts payable Accrued expenses Income taxes payable Note payable (due 2020, secured by land) Note payable (due 2022) Liabilities since the date of the order for relief Accounts payable Note payable (due 2019) Stockholders' equity Common stock Deficit $ 143,000 50,000 42,000 120,000 190,000 40,000 24,000 38,000 120,000 100,000 $ 80,000 130,000 $ 220,000 (253,000)

Answer 1

Balance sheet
Particulars	Amount	Amount
Assets
current assets
cash	$ 43,000.00
inventory	$ 65,000.00	$ 108,000.00
Non current assets
Land	$ 200,000.00
Building	$   240,000.00
Euipments	$   174,000.00	$ 614,000.00
Total Assets		$ 722,000.00
Laibilities and stockholder's equity
current laibilities
Accounts payables	$ 80,000.00	$ 80,000.00
non currentlabilities
notes payable (2019)	$   130,000.00
notes payable (2020 secured by land)	$ 120,000.00	$ 2,50,000.00
laibility not subject to compromise		$ 330,000.00
laibilities subject to compromise
Accounts payables	$   143,000.00
accrued expenses	$ 50,000.00
income tax payable	$ 42,000.00
notes payable (2022)	$   1,90,000.00	$ 425,000.00
total laibilities		$ 755,000.00
stockholer's equity
common stock			$   220,000.00
retained earning			$ -253,000.00	$   -33,000.00
total laibilities & stockholder's deficit		$ 722,000.00