Question: Prost Company has filed a bankruptcy petition.
Prost Company has filed a bankruptcy petition. Its account balances at December 31, 2015, are presented here: 
The following additional information is available: 1. All notes receivable with the exception of one for $2,500 are expected to be collected. The notes receivable are pledged as security on the bank notes payable. 2. Of the total accounts receivable, $55,000 is expected to be collected. The accounts receivable are also pledged as security on the bank notes payable. 3. Finished goods can be sold at 30% above cost. Selling expenses will be approximately 15% of selling price. Work in process is to be completed at an additional cost of $30,000, of which $19,000 represents the cost of raw materials. The expected selling price of the work in process (after completion) is 10% above cost, with selling expenses of 15% of selling price. Unused raw materials can be sold for $18,000. 4. Prepaid expenses are fully recoverable. 5. The investment in stock consists of 100 shares of MBI Company with a current market value of $19,000. 6. Land is appraised at $200,000, and plant and equipment is appraised at $205,000. The land and plant and equipment serve as collateral on the mortgage payable. Accrued but unrecorded interest on the mortgage payable amounts to $3,000. Required A. Prepare a statement of affairs, including a deficiency account. B. Compute the estimated dividend to be paid general unsecured creditors.
Transcribed Image Text:
Cash S 2,500 Notes Reccivable 60,000 Accounts Rececivable (net) 76,000 Inventories Finished Goods 43000 Work in Process 60000 Raw Materials S1p00 Prepaid Expenses 4,000 Investment in Stock 12000 Land 140,000 Property and Equipment (net) 400000 Goodwill 10000 Total S858,500 Accounts Payable $220000 Accrued Wages (all with priority ) Bank Noks Payable 45,000 225,000 Mortyage Payablk 350,000 Common Stock 380000 Retained Earnings (deficit) (361,500) S858,500 Total
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