Question
In: Finance
A company preparing for a Chapter 7 liquidation has the following liabilities: Note payable A of...
A company preparing for a Chapter 7 liquidation has the following liabilities:
Note payable A of $126,000 secured by land having a book value of $68,000 and a fair value of $88,000.
Note payable B of $156,000 secured by a building having a $78,000 book value and a $58,000 fair value.
Note payable C of $78,000, unsecured.
Administrative expenses payable of $38,000.
Accounts payable of $138,000.
Income taxes payable of $48,000.
The company also has these other assets:
Cash of $10,400.
Inventory of $136,000 but with a net realizable value of $78,000.
Equipment of $126,000 but with a net realizable value of $68,000.
How much will each of the company's liabilities be paid at liquidation?
Notes Payable A =
Notes Payable B =
Note Payable C =
Payments on administration expenses = $38,000
Payment on accounts payable =
Payments on income taxes payable = $48,000
Solutions
jeff jeffy answered 7 months agoRelated Solutions
A company preparing for a Chapter 7 liquidation has the following liabilities: Note payable A of...
A company preparing for a Chapter 7 liquidation has the
following liabilities: Note payable A of $138,000 secured by land
having a book value of $74,000 and a fair value of $94,000. Note
payable B of $168,000 secured by a building having a $84,000 book
value and a $64,000 fair value. Note payable C of $84,000,
unsecured. Administrative expenses payable of $44,000. Accounts
payable of $144,000. Income taxes payable of $54,000. The company
also has these other assets: Cash of...
A company preparing for a Chapter 7 liquidation has the following liabilities: Note payable A of...
A company preparing for a Chapter 7 liquidation has the
following liabilities:
Note payable A of $140,000 secured by land having a book value
of $75,000 and a fair value of $95,000.
Note payable B of $170,000 secured by a building having a
$85,000 book value and a $65,000 fair value.
Note payable C of $85,000, unsecured.
Administrative expenses payable of $45,000.
Accounts payable of $145,000.
Income taxes payable of $55,000.
The company also has these other assets:
Cash of...
A company preparing for a Chapter 7 liquidation has the following liabilities: • Note payable A...
A company preparing for a Chapter 7 liquidation has the
following liabilities:
• Note payable A of $98,000 secured by land having a book value
of $54,000 and a fair value of $74,000.
• Note payable B of $128,000 secured by a building having a
$64,000 book value and a $44,000 fair value.
• Note payable C of $64,000, unsecured.
• Administrative expenses payable of $24,000.
• Accounts payable of $124,000.
• Income taxes payable of $34,000.
The company also...
A company that was to be liquidated had the following liabilities: Income taxes 10000 Note Payable...
A company that was to be liquidated had the following
liabilities:
Income taxes
10000
Note Payable (secured by building)
200000
Account Payable
100000
Salaries (Ahmed 20000 and Salem 2000)
22000
Bond payable
90000
Admin expenses for liquidation
30000
The company had the following assets:
Item
Book-value
Fair value
Current Assets
100000
45000
Pre-paid Assets
2000
1800
Building
180000
155000
Land
120000
150000
Maximum employees’ payment does not excess $12475.
a. Calculate total assets available to pay liabilities with
priority...
Choose at least two concepts from the following: partnership, corporation, liquidation, bankruptcy chapter 7, bankruptcy chapter...
Choose at least two concepts from the following: partnership,
corporation, liquidation, bankruptcy chapter 7, bankruptcy chapter
11, reorganization, trust, estates, consolidation, parent company,
subsidiary, acquisition, partnerships termination, variable
interest entity, equity method, fair value method.
Required:
Explain how you may use them in your present or future
accounting position. Make sure you provide details to include how
each concept will help you support the financial goals of the
company you currently work for or will work for in the future.
2. What is Chapter 7 liquidation and Chapter 11 reorganization? When should each be used? Please...
2. What is Chapter 7 liquidation and Chapter 11 reorganization?
When should each be used? Please choose one company that has gone
through either type of bankruptcy proceeding and describe the
circumstances leading up to the filing.
Duchon Industries had the following balance sheet at the time it defaulted on its interest payments and filed for liquidation under Chapter 7.
12/8/2012
Chapter:
24
Problem:
5
Duchon Industries had the following balance sheet at the time it
defaulted on its interest payments and filed for liquidation under
Chapter 7. Sale of the fixed assets, which were pledged as
collateral to the mortgage bondholders, brought in $900 million,
while the current assets were sold for another $400 million. Thus,
the total proceeds from the liquidation sales were $1,300 million.
Trustee's costs amounted to $1 million; no single worker was due
more than...
Anteium Company owes $81,100 on a note payable that is currently due. The note is held...
Anteium Company owes $81,100 on a note payable that is currently
due. The note is held by a local bank and is secured by a mortgage
lien attached to three acres of land worth $48,500. The land
originally cost Anteium $31,500 when acquired several years ago.
The only other account balances for this company are Investments of
$22,600 (but worth $27,600), Accounts Payable of $22,200, Common
Stock of $41,200, and a deficit of $89,400. Anteium is insolvent
and attempting to...
Liquidation Southwestern Wear Inc. has the following balance sheet: Current assets $1,875,000 Accounts payable $375,000 Fixed...
Liquidation
Southwestern Wear Inc. has the following balance sheet:
Current assets
$1,875,000
Accounts payable
$375,000
Fixed assets
1,875,000
Notes payable
750,000
Subordinated debentures
750,000
Total debt
$1,875,000
Common equity
1,875,000
Total assets
$3,750,000
Total liabilities and equity
$3,750,000
The trustee's costs total $233,500, and the firm has no accrued
taxes or wages. Southwestern has no unfunded pension liabilities.
The debentures are subordinated only to the notes payable. If the
firm goes bankrupt and liquidates, how much will each class of...
Liquidation Southwestern Wear Inc. has the following balance sheet: Current assets $1,875,000 Accounts payable $375,000 Fixed...
Liquidation
Southwestern Wear Inc. has the following balance sheet:
Current assets
$1,875,000
Accounts payable
$375,000
Fixed assets
1,875,000
Notes payable
750,000
Subordinated debentures
750,000
Total debt
$1,875,000
Common equity
1,875,000
Total assets
$3,750,000
Total liabilities and equity
$3,750,000
The trustee's costs total $215,250, and the firm has no accrued
taxes or wages. Southwestern has no unfunded pension liabilities.
The debentures are subordinated only to the notes payable.
If the firm goes bankrupt and liquidates, how much will
each class of...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- THIS PROGRAM HAS TO BE WRITTEN IN C Single function to perform the parity computation on...
- Consider a buffer system consisting of Benzoic acid (pKa = 4.20) and sodium benzoate, a) Would...
- Decision Variables S T Minimize 1.8S + 2.20T Subject to: Potassium 5S + 8T >= 200...
- A neurologist needs to counsel a stroke victim and her husband about possible outcomes, treatment options,...
- Case Study: Personal Beliefs in the Workplace Don Shakow was a prominent professional who worked in...
- 1: Competency framework usage is the modern best practice in management. What is meant by competency...
- A 19.34 g mixture of sugar (C12H22O11) and table salt (NaCl) is dissolved in 231 g...
ADVERTISEMENT