In: Accounting
ABC Company recently petitioned for bankruptcy and is now in the
process of preparing a statement of affairs. The carrying values
and estimated fair values of the assets of ABC Company are as
follows:
Carrying Value Fair Value
Cash 16,000 16,000
Accounts Receivable 36,000 24,000
Inventory 48,000 28,000
Land 60,000 56,000
Building (net) 144,000 80,000
Equipment (net) 136,000 64,000
Total 440,000 268,000
Debts of ABC Company are as follows:
Accounts payable 48,000
Wages Payable (all have priority) 8,000
Taxes payable 8,000
Notes payable (secured by receivable and inventory) 96,000
Interest on Notes Payable 4,800
Bonds Payable (secured by land and building) 120,000
Interest on bonds Payable 5,600
Total 290,400
5. What is the total amount of unsecured claims?
6. What estimated amount will be available for general unsecured creditors upon liquidation?
7. What is the estimated dividend percentage?