The Modesto Company is facing possible liquidation.
Using the following information, prepare a statement of
financial affairs in good form.
Here’s the company’s most recent balance sheet:

Assets Liabilities and equities

Cash $12,000 Accounts payable $170,000
Accounts Receivable 60,000 Notes payable 90,000
Inventory 120,000 Mortgage payable 80,000
Investments 45,000
Equipment 105,000 Common stock 75,000
Land 82,000 Retained earnings 9,000
Total assets $424,000 Total Liab. and Eq’s $424,000

The mortgage payable is fully secured by the land. The land can be sold
immediately for $103,000
The equipment partially secures the notes payable. The equipment is not in
good shape and at auction will bring only $30,000
The market has declined so the investments have lost 40% of their value.
It is estimated that 30% of the accounts receivable will have to be written off.
The inventory is outdated and will bring only 50% of its book value at
auction.
Additional income taxes will be $26,000
Administrative expenses for bankruptcy are expected to total $20,000.