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In: Accounting

Creditors of Jones Corporation are considering petitioning the courts to force the company into Chapter 7...

Creditors of Jones Corporation are considering petitioning the courts to force the company into Chapter 7 bankruptcy. The following information has been determined. Administrative expenses in connection with the liquidation are estimated to be $33,000.

Book
Value		 Net
Realizable
Value
Cash $ 17,000 $ 17,000
Accounts receivable 43,000 29,000
Inventory 56,000 42,000
Supplies 14,000 0
Investments 13,000 19,000
Land 71,000 83,000
Buildings 101,000 79,000
Equipment 61,000 46,000
Notes payable (secured by land) 76,000
Notes payable (secured by buildings) 100,000
Bonds payable (secured by equipment) 137,000
Accounts payable 81,000
Salaries payable (two weeks’ salary for three employees) 17,000
Taxes payable 25,400


What is the amount of money that each class of creditors can anticipate receiving?

Free assets

Liabilities with priority

Free assets after payment of liabilities with priority

Unsecured liabilities

Payment on notes payable (secured by land)

Payment on notes payable (secured by buildings)

Payment on bonds payable

Payment on accounts payable (unsecured)

Payment of salaries payable

Payment of taxes payable

Payment of administrative expenses

Solutions

Expert Solution

ekkarill92 answered 1 year ago
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