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  • Gone Corporation Statement of Affairs Assets Liabilities

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    Robin Saliva
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    Gone Corporation's statement of affairs as of January 1, 20X1 shows that while its book assets were $3 million, its realizable assets were only $1.2 million. It had a building pledged as collateral for a $700,000 mortgage, and machinery pledged against a $500,000 bank loan. After paying priority unsecured liabilities of $1.06 million such as legal fees and taxes, there were only $340,000 of assets available for unsecured creditors, leaving an estimated $860,000 deficiency or "squeeze" for them. Unsecured non-priority creditors were owed $1 million.

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    Illustration - Liquidation Reports (1)

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    Gone Corporation's statement of affairs as of January 1, 20X1 shows that while its book assets were $3 million, its realizable assets were only $1.2 million. It had a building pledged as collateral for a $700,000 mortgage, and machinery pledged against a $500,000 bank loan. After paying priority unsecured liabilities of $1.06 million such as legal fees and taxes, there were only $340,000 of assets available for unsecured creditors, leaving an estimated $860,000 deficiency or "squeeze" for them. Unsecured non-priority creditors were owed $1 million.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    13 views1 page

    Gone Corporation Statement of Affairs Assets Liabilities

    Uploaded by

    Robin Saliva
    Gone Corporation's statement of affairs as of January 1, 20X1 shows that while its book assets were $3 million, its realizable assets were only $1.2 million. It had a building pledged as collateral for a $700,000 mortgage, and machinery pledged against a $500,000 bank loan. After paying priority unsecured liabilities of $1.06 million such as legal fees and taxes, there were only $340,000 of assets available for unsecured creditors, leaving an estimated $860,000 deficiency or "squeeze" for them. Unsecured non-priority creditors were owed $1 million.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 1

    GONE CORPORATION

    STATEMENT OF AFFAIRS
    AS OF JANUARY 1, 20X1

    Available for unsecured


    Book values ASSETS Realizable values creditors
    Assets pledged to fully secured creditors:
    800,000 Building - net 1,000,000
    Mortgage payable (700,000) 300,000

    Assets pledged to partially secured creditors:


    600,000 Machinery - net 300,000
    Short-term bank loan (500,000) -

    Free assets:
    100,000 Cash 100,000
    600,000 Accounts receivable 500,000
    900,000 Inventories 500,000 1,100,000
    Total free assets 1,400,000
    Less: Unsecured liabilities with priority (see below) (1,060,000)
    Net free assets 340,000
    Estimated deficiency (squeeze) 860,000
    3,000,000 Totals 1,200,000

    Unsecured non-priority
    Book values LIABILITIES Realizable values liabilities
    Unsecured liabilities with priority:
    6
    - Legal and other fees 0,000
    1,000,000 Income tax payable 1,000,000 -

    Fully secured creditors:


    700,000 Mortgage payable 700,000 -

    Partially secured creditors:


    500,000 Short-term bank loan 500,000
    Machinery - net (300,000) 200,000

    Unsecured creditors:
    300,000 Accrued payables 300,000
    700,000 Accounts payable 700,000 1,000,000

    (200,000) Shareholders' equity - -


    3,000,000 Totals 1,200,000

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