Use the Following Data
on July 1, You Were

Use the following data
On July 1, you were appointed receiver for the Fallimento Company, which is in Chapter 7 bankruptcy. Fallimento's balance sheet on July 1 is as follows:
$$\begin{array} { | l | r | l | r | } \hline \text { Assets } & & \text { Liabilities and Equity } & \\\hline \text { Cash } & \$ 5,000 & \text { Loan payable } & \$ 170,000 \\\hline \text { Accounts receivable } & 50,000 & \text { Note payable } & 40,000 \\\hline \text { Merchandise } & 40,000 & \text { Equity \{deficit } ) & \{ 15,000 \} \\\hline \text { Equipment } & \underline { 100,000 } & & \\\hline \text { Total } & \$ 195,000 & \text { Total } & \$ 195,000 \\\hline\end{array}$$ The note is secured by the equipment. All other liabilities are unsecured. During the next two months, you completed the following transactions:
•Collected $45,000 on the accounts receivable. The remainder are considered uncollectible.
•Sold half the merchandise for $25,000. The remaining merchandise is expected to yield $18,000.
•Sold the equipment for $110,000 and paid the note.
•Accrued administrative expenses of $5,000.
•Paid $140,000 on the loan.
-Prepare a statement of realization and liquidation.