Practice for Corporate liquidation

Cam Corp. experienced a large operating loss in 2016 and the first half of 2017. By July 2017 its
account payable were overdue, and its account receivable had been pledged to support a bank loan that was in default.
Cam creditors were unwilling to extend additional credit or to ammend the terms of any of
their loans, and on August 1, 2017 Cam filed a voluntary pettion for bankruptcy.
The following balance sheet was prepared at the filing bankcruptcy date.
CAM CORPORATION BALANCE SHEET, AUGUST 1, 2017 On 1 August 2017 Cam corporation was transferred
Assets to the Cam Corporation in Trusteeship.
Cash 3,000 Complete the statement and prepare the
Marketable securities (at MV) 7,000 Journal entries for the transferred Cam Corp.
Account Receivable-net 25,000 in Trusteeship
Inventories 50,000 Cash 3,000
Prepaid expenses 4,000 89,000 Marketable securities(MV) 7,000
Land 15,000 Account Receivable-net 25,000
Building-net 40,000 Inventories 50,000
Equipment-net 30,000 Prepaid expenses 4,000
Intangible Assets 6,000 91,000 Land 15,000
Total Assets 180,000 Building-net 40,000
Liabilities and Stockholders' Equity Equipment-net 30,000
Account payable 65,000 Intangible Assets 6,000
Wages payable 13,000 Account payable 65,000
Property taxes payable 2,000 Wages payable 13,000
Notes payable-bank 25,000 Property taxes payable 2,000
Notes payable- suppliers 5,000 Notes payable-bank 25,000
Interest payable 7,000 117,000 Notes payable- suppliers 5,000
Mortage payable 50,000 Interest payable 7,000
Total Liabilities 167,000 Mortgage Payable 50,000
Stockholders' Equity Estate equity 13,000
Capital Stock par $20 200,000
Retained Earnings (187,000)
Total stockholders' equity 13,000
Total Liabilities & Stockholders' Equity 180,000
Note: Mortgage is secured by Land Buidings as collateral.
Partially secured creditors are Notes from Bank. Priority Payable
are Wages and taxes. The remaining payables are unsecured.
THERE ARE 10000 OUTSTANDING SHARE IN THE MARKET
Practice for Corporate liquidation
Cam Corp. experienced a large operating loss in 2016 and the first half of 2017. By July 2017 its
account payable were overdue, and its account receivable had been pledged to support a bank loan that was in default.
Cam creditors were unwilling to extend additional credit or to ammend the terms of any of
their loans, and on August 1, 2017 Cam filed a voluntary pettion for bankruptcy.
The following balance sheet was prepared at the filing bankcruptcy date.
CAM CORPORATION BALANCE SHEET, AUGUST 1, 2017 On 1 August 2017 Cam corporation was transferred
Assets to the Cam Corporation in Trusteeship.
Cash 8,500 Complete the statement and prepare the
Marketable securities (at MV) 10,000 Journal entries for the transferred Cam Corp.
Account Receivable-net 25,000 in Trusteeship
Inventories 40,000 Cash 8,500
Prepaid expenses 5,000 88,500 Marketable securities(MV) 10,000
Land 25,000 Account Receivable-net 25,000
Building-net 80,000 Inventories 40,000
Equipment-net 40,000 Prepaid expenses 5,000
Intangible Assets 6,000 151,000 Land 25,000
Total Assets 239,500 Building-net 80,000
Liabilities and Stockholders' Equity Equipment-net 40,000
Account payable 95,000 Intangible Assets 6,000
Wages payable 10,000 Account payable
Property taxes payable 5,000 Wages payable
Notes payable-bank 15,000 Property taxes payable
Notes payable- suppliers 3,000 Notes payable-bank
Interest payable 7,500 135,500 Notes payable- suppliers
Mortage payable 100,000 100,000 Interest payable
Total Liabilities 235,500 Mortgage Payable
Stockholders' Equity Estate equity
Capital Stock par $10 400,000
Retained Earnings (396,000)
Total stockholders' equity 4,000
Total Liabilities & Stockholders' Equity 239,500
Note: Mortgage is secured by Land Buidings as collateral.
Partially secured creditors are Notes from Bank. Priority Payable
are Wages and taxes. The remaining payables are unsecured.
THERE ARE 40000 OUTSTANDING SHARE IN THE MARKET
an that was in default.

ation was transferred

prepare the
erred Cam Corp.

95,000
10,000
5,000
15,000
3,000
7,500
100,000
4,000