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PR Advance 1 Exercise 10-7 Statement of Affairs

Ball Company's statement of affairs from June 30, 2015 shows that the company has $800,400 in total book value assets but only $355,000 in total realizable value. Liabilities include $120,000 in accrued wages that have priority, $100,000 to a fully secured creditor, $100,000 to a partially secured creditor, and $350,000 to unsecured creditors. This results in an estimated $124,600 deficiency to unsecured creditors.

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891 views2 pages

PR Advance 1 Exercise 10-7 Statement of Affairs

Ball Company's statement of affairs from June 30, 2015 shows that the company has $800,400 in total book value assets but only $355,000 in total realizable value. Liabilities include $120,000 in accrued wages that have priority, $100,000 to a fully secured creditor, $100,000 to a partially secured creditor, and $350,000 to unsecured creditors. This results in an estimated $124,600 deficiency to unsecured creditors.

Uploaded by

Reynaldi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as XLSX, PDF, TXT or read online on Scribd
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Ball Company Statement of Affairs June 30, 2015

Book Value Assets Reliazable Value


Assets pledged with fully secured creditors
$ 180,000.00 Inventory $ 110,000.00
Notes Payable $ (100,000.00)
$ 10,000.00
Assets pledged with partially secured creditor
$ 170,000.00 Accounts Receivable $ 95,000.00
Notes Payable $ (100,000.00)
$ (5,000.00)

Free Assets
$ 20,400.00 Cash $ 20,400.00
$ 430,000.00 Property & Equipment $ 320,000.00
Total Net Realizable Value $ 350,400.00
Liabilities Having Priority
Accrued Wages $ 120,000.00
Net Free Assets $ 230,400.00
Estimated Deficiency to Unsecured Creditors (balancing amount) $ 124,600.00
$ 800,400.00 $ 355,000.00

Book Value Equities Unsecured Liabilities


Liabilities Having Priority
$ 120,000.00 Accrued Wages $ 120,000.00

Fully Secured Creditors


Notes Payable $ 100,000.00
Inventory $ 110,000.00
$ (10,000.00)
Partially Secured Creditors
$ 200,000.00 Notes Payable $ 100,000.00
Accounts Receivable $ (95,000.00)
$ 5,000.00
Unsecured Creditors
$ 350,000.00 Accounts Payable $ 350,000.00

Stockholder's Equity
$ 400,000.00 Common Stock
$ (269,600.00) Retained Earnings (deficit)
$ 800,400.00 $ 355,000.00
Estimated Deficiency
Deficiency Account

$ (70,000.00)

$ (75,000.00)

$ (110,000.00)

$ (255,000.00)

Deficiency Accounts

$ 400,000.00
$ (269,600.00)
$ 130,400.00
$ (124,600.00)

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