Hanna Corporation filed a petition under Chapter 7 of the bankruptcy act on June 30, 2011. Data relevant to its financial position as of this date are:
| Book Value | Estimated Net Realizable Values |
Cash | $2,200 | $2,200 |
Accounts receivable—net | 15,000 | 13,500 |
Inventories | 20,000 | 22,500 |
Equipment—net | 55,000 | 28,000 |
Total assets | $92,200 | $66,200 |
Accounts payable | $26,400 |
|
Rent payable | 7,600 |
|
Wages payable | 12,000 |
|
Note payable plus accrued interest | 31,000 |
|
Capital stock | 55,000 |
|
Retained earnings (deficit) | (39,800) |
|
Total liabilities and equity | $92,200 |
|
REQUIRED
1. Prepare a statement of affairs assuming that the note payable and interest are secured by a mortgage on the equipment and that wages are less than $4,000 per employee.
2. Estimate the amount that will be paid to each class of claims if priority liquidation expenses, including trustee fees, are $4,000 and estimated net realizable values are actually realized.
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