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Statement of Realization and Liquidation At January 1, 2020, the records of Sharon Thomson, trustee in bankruptcy...

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Accounting

Statement of Realization and Liquidation

At January 1, 2020, the records of Sharon Thomson, trustee inbankruptcy for Davis Corporation, showed the following:

Dr (Cr)
Cash20,000
Assets not realized:
Land60,000
Building250,000
Equipment75,000
Patents15,000
Liabilities not liquidated:
Accounts payable(279,000)
Loans payable(341,000)
Estate deficit200,000

During January, Thomson sold equipment having a book value of35,000 for 10,000, and sold the patents for 30,000. Thomson waspaid 5,000 as a trustee's fee, and 50,000 was distributedproportionately to the creditors.

Required:

Prepare a statement of realization and liquidation for Januaryand a balance sheet and statement of estate deficit as of January30, 2020.

Answer & Explanation Solved by verified expert
4.1 Ratings (819 Votes)

Statement of Relization and Liquidtion
Prticulars Amount ($) Prticulars Amount ($)
To Opening Cash 20000 By Trustee Fee 5000
Equipment 10,000 By Pref. Creditors 50000
Patents 30,000
By Cash 5000
Total 60000 Total 60000
Statement of Estate Deficit
As on 31st Jan 2020
To Opening Cash 20000 By Trustee Fee 5000
To assets not specifically pledged By Pref. Creditors 50000
Land 60,000 Loans Payable 341000
Building 250,000
Equipment 40,000
Equipment 10,000
Patents 30,000
By Surplus 14000
Total 410000 Total 410000
Balance Sheet
At Jan 31, 2020
Particulars Amount ($)
Shareholder's Fund
Authorised Share Capital                                                            -  
Issued and Paid up Share Capital                                      -  
Available for Eq Share Holders                             14,000
Long Term Liabilities (More than 12 months)                                      -  
Current Liabilities (Less than 12 months)
Loans Payable                          341,000
Total                          355,000
Assets
Fixed Assets
Land                             60,000
Building                          250,000
Equipment                             40,000
Patents                                      -  
Current Assets
Cash                               5,000
Total                          355,000

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