Statement of Affairs and Deficiency Account
A receiver was appointed by the courts to manage the affairs of Davis Manufacturing Company on March 31, 2009. On this date, the following balance sheet applied;
Davis Manufacturing Company Balance Sheet
March 31, 2009
Cash 22,000
Accounts Payable 115,500
Notes Receivable 60,000
Accrued Interest on Notes Receivable 1,375

Inventories
Finished Goods 140,000
Work in Process 97,500
Raw Materials 60,000
Supplies 7,750
Prepaid Expenses 3,000
Investment in Stock 66,250
Land 105,000
Buildings (net) 495,000
Equipment (net) 232,500
Total 1,406,375
Notes Payable 196,000
Accounts Payable 587,500
Wages Payable (all with priority) 33,750
Payroll Taxes Payable (all with priority) 5,250
Accrued Interest Payable
On Notes Payable 2,750
On Mortgage Note Payable 21,250
Mortgage Note Payable 440,000
Common Stock 469,000
Retain Earnings (Deficit) (349,125)
Total 1,406.375

Additional Information:
1. The cash account includes a 500 travel advance that has been spent.
2. Of the accounts receivables, 75,000 is believed to be collectible. The remaining accounts are doubtful, but it is believed that about one-third of these will be realized eventually. The accounts receivable are pledged as security on a 10,000 note payable.
3. Notes receivables of 50,000 have been pledges as security on a note payable of 45,000.
This portion of the notes receivable has an estimated realizable value of 35,000. The remaining notes receivable, including the accrued interest, are expected to be fully collected. The 45,000 note payable has accrued interest due of 1,000.
4. The finished-goods inventory is expected to sell at 20% above its cost, with expenses involved in its disposition approximating 10% of selling price. The work in process inventory can be completed at an additional cost of 55,000, of which 40,000 represents
materials used from the present raw materials inventory. The completed work in process should then sell for 145,000; the remaining raw material should sell for one-half their cost. Supplies are expected to realize 1,300.
5. The investment in stock consists of 2,000 shares of Monelli Vineyards. The stock has a current market value of 50 per share and is pledged as security on a note payable of 41,000. Interest accrued on the note payable amounts to 1,750.
6. The land and buildings have been appraised at 165,000 and 260,000, respectively. They are pledged as collateral on the mortgage note payable.
7. The equipment is expected to realize 100,000.
8. Prepaid expenses are nonrealizable.

Required:
A. Prepare a statement of affairs
B. Prepare a deficiency account detailing estimated gains and losses
C. find out the dividend rate per dollar of unsecured liability