Question
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
ekkarill92 answered 1 year agoRelated Solutions
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Given the financial statements for Jones Corporation and Smith
Corporation:
JONES CORPORATION
Current Assets
Liabilities
Cash
$
121,300
Accounts
payable
$
122,000
Accounts receivable
81,800
Bonds payable (long term)
82,400
Inventory
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Current Assets
Liabilities
Cash
$
21,400
Accounts payable
$
121,000
Accounts receivable
86,100
Bonds payable (long term)
89,700
Inventory
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