38.

A trustee has been appointed for Smith Company, which is being liquidated under Chapter 7

of the Bankruptcy Code. The following transactions occurred after the assets were transferred to

the trustee:

1. Credit sales by the trustee were $100,000. Cost of goods sold were $72,000, consisting of all

the inventory transferred from Smith.

2. The trustee sold all $20,000 worth of marketable securities for $15,000.

3. Receivables collected by the trustee:

Old: $28,000 of the $50,000 transferred

New: $65,000

4. Disbursements by the trustee:

Old current payables: $31,000 of the $65,000 transferred

Trustee's expenses: $6,000

5. Recorded $24,000 depreciation on the plant assets of $120,000 transferred from Smith.

Required:

Prepare a statement of realization and liquidation according to the traditional approach

illustrated in the chapter.