Limestone Company

The following balance sheet has been prepared by the accountant for Limestone Company as of June 3, 2011, the date on which the company is to file a voluntary petition of bankruptcy: Limestone Company Balance Sheet June 3, 2011 Assets Cash $3,000 Accounts receivable 65,000 Inventory 88,000 Land 100,000 Buildings (net) 300,000 Equipment (net) 180,000 Total Assets $736,000 Liabilities and Equities Accounts Payable $98,000 Notes payable current (secured by equipment) 250,000 Notes payable long term (secured by land and buildings) 190,000 Common Stock 120,000 Retained Earnings 78,000 Total Liabilities and equities $736,000 Additional Information: If the company is liquidated, administrative expense are estimates at $18,000 The accounts Payable figure includes $10,000 in wages earned by the company s 12 employees during May. No one earned more than $2,200. Liabilities do not include taxes of $14,000 owed to the U.S. Government Company officials estimate that 40 percent of the accounts receivable will be collected in liquidation and that the inventory disposal will bring $80,000. The land and buildings will be sold together for approximately $310,000; the equipment should bring $130,000 at auction. Prepare a statement of financial affairs for Limestone Company as of June 3, 2011.