Mallory Corporation is being liquidated under Chapter 7 of the Bankruptcy Act. On May 1, 20X5, you are appointed the court's trustee for the liquidation. The book values for assets and liabilities, on May 1, 20X5, were as follows:
During May through July of 20X5, the following occurred:
The mortgage is secured by the land and building and the bank loan is secured by the machinery. The accounts payable are secured by the inventories.
Three-fourths of the accounts receivable were collected. Of the remaining accounts, $10,000 are believed to be uncollectible.
The inventories were sold for $170,000.
The land and building were sold for $20,000 and assumption of the mortgage. The machinery sold for $70,000 and the proceeds were remitted to the bank.
Salaries payable and $170,000 of the accounts payable were paid.
Required:
Complete Figure 21-A: Statement of Realization and Liquidation for May, June, and July of 20X5.

Question

Mallory Corporation is being liquidated under Chapter 7 of the Bankruptcy Act. On May 1, 20X5, you are appointed the court's trustee for the liquidation. The book values for assets and liabilities, on May 1, 20X5, were as follows:  
During May through July of 20X5, the following occurred:
The mortgage is secured by the land and building and the bank loan is secured by the machinery. The accounts payable are secured by the inventories.
Three-fourths of the accounts receivable were collected. Of the remaining accounts, $10,000 are believed to be uncollectible.
The inventories were sold for $170,000.
The land and building were sold for $20,000 and assumption of the mortgage. The machinery sold for $70,000 and the proceeds were remitted to the bank.
Salaries payable and $170,000 of the accounts payable were paid.
Required:
Complete Figure 21-A: Statement of Realization and Liquidation for May, June, and July of 20X5.

Quizplus · Accepted Answer

The Answer of Mallory Corporation is being liquidated under Chapter 7 of the Bankruptcy Act. On May 1, 20X5, you are appointed the court's trustee for the liquidation. The book values for assets and liabilities, on May 1, 20X5, were as follows:  
During May through July of 20X5, the following occurred:
The mortgage is secured by the land and building and the bank loan is secured by the machinery. The accounts payable are secured by the inventories.
Three-fourths of the accounts receivable were collected. Of the remaining accounts, $10,000 are believed to be uncollectible.
The inventories were sold for $170,000.
The land and building were sold for $20,000 and assumption of the mortgage. The machinery sold for $70,000 and the proceeds were remitted to the bank.
Salaries payable and $170,000 of the accounts payable were paid.
Required:
Complete Figure 21-A: Statement of Realization and Liquidation for May, June, and July of 20X5.

Mallory Corporation Is Being Liquidated Under Chapter 7 of the Bankruptcy