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2. Record any new transaction from the sale of assets, payment of liabilities/expenses or
record any transaction previously omitted.
Note:
3. Determine Balances of Cash Account and Estate Equity Account
4. After Determining Balances using ledger accounts, a new Balance Sheet can be created.
When all assets are sold or written off, whatever cash remain is paid out to priority claims first and then
unsecured creditors last. (Review Ranking of Claims Table from powerpoint). Remaining cash left after
paying priority claims is divided among the remaining unsecured claims. The figures used in calculations
are from the example below.
Payment of priority claims:
o $2,000 Trustee fee is a priority claim (65,495 – 2000 = 63,495 cash remaining.)
o Total Liabilities $78,500 – 2,000 Trustee Fee payable = $78,500 Unsecured Creditors
A formula can be used:
Remaining cash___ = $63,495 = 0.83c (only 83c can be paid on every dollar owed)
Unsecured creditors 76,500
Note:
Payment of unsecured creditors calculation:
Payable * 0.83
Eg. Note payable 65,000 *0.83 = $53,950
When all assets have been sold/written off, Cam had the following account balances:
For an assessment, Journal Entries can be prepared if required or only the calculation to determine the
cents per dollar to be paid to unsecured creditors.