Question

A trustee has been appointed for Pace Inc., which is being liquidated under Chapter 7 of the Bankruptcy Code. The following occurred after the assets were transferred to the trustee: 1. Sales on account by the trustee were $76.800. Cost of goods sold were $60.800. consisting of all inventory transferred from Pace. 2. The trustee sold all $12.700 worth of marketable securities for $9.800. 3. Receivables collected by the trustee: old: New: $20,890 of the $38,100 transferred $46,609 4. Depreciation of $16,700 on the plant assets of $96,800 transferred from Pace recorded. 5. Disbursements by the trustee: Old current payables: Trustee's expenses: $22,300 of the $48,200 transferred $ 4,500 Required: Prepare a statement of realization and liquidation according to the traditional approach illustrated in the chapter. PACE CORPORATION Statement of Realization and Liquidation Assets Assets Realized Assets to be Realized Assets Acquired Assets Not Realized Supplementary Items Supplementary Credits Supplementary Charges Liabilities Liabilities Liquidated Liabilities to be Liquidated Liabilities Not Liquidated Liabilities incurred

Answer 1

Ans: Statement of realization and liquidation:

Assets
Assets to be realized	Amount($)	Assets Realized	Amount($)
Old receivables , Net	38,100	Old Receivables	20,800
Marketable securities	12,700	New Receivables	46,600
Old Inventory	60,800	Marketable Securities	9,800
Depreciation Assets, Net	96,800	Sales of inventory	76,800
Assets Acquired		Assets Not Realized
New Receivables	76,800	Old Receivables, net{38,100-20,800}	17,300
		New Receivables, net(76,800-46,600)	30,200
		Depreciable Assets{96,800-16,700}	80,100
Supplementary Items
Supplementary charges		Supplementary Credits
Trustee fee	4,500	Net loss(337,910-329,800 balance)	8,110
Liabilities
Liabilities Liquidated		Liabilities to be liquidated
Old current Payable	22,300	old current Payable	48,200
Liabilities not liquidated		Liabilities Incurred
Old current Payable	25,900
Total	337,910	Total	337,910