Problem

Statement of Realization and LiquidationA trustee has been appointed for Pace Inc., which...

Statement of Realization and Liquidation

A trustee has been appointed for Pace Inc., which is being liquidated under Chapter 7 of the Bankruptcy Code. The following transactions occurred after the assets were transferred to the trustee:

1. Sales on account by the trustee were $75,000. Cost of goods sold were $60,000, consisting of all the inventory transferred from Pace.


2. The trustee sold all $12,000 worth of marketable securities for $10,500.


3. Receivables collected by the trustee:

Old:

$21,000 of the $38,000 transferred

New:

$47,000


4. Recorded $16,000 depreciation on the plant assets of $96,000 transferred from Pace.


5. Disbursements by the trustee:

Old current payables:

$22,000 of the $48,000 transferred

Trustee’s expenses:

$4,300

Required

Prepare a statement of realization and liquidation according to the traditional approach illustrated in the chapter.

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