Shi Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $26,200 in freecash. The following debts, totaling $43,050, remain:$ 7,000Government claims to unpaid taxesSalary during last month owed to Mr. Key (not anofficer)Administrative expenses19,2003,450Salary during last month owed to Ms. Rankin (notan officer)Unsecured accounts payable5,8507,550Indicate how much money will be paid to the creditor associated with each debt.Types of DebtsAmountsAdministrative expensesGovernment claims to unpaid taxesSalary during last month owed to Mr. Key and Ms. Rankin

Given: Free cash retained - $26,200 Unpaid taxes claimed by the government - $7,000 Owed Salary to…

Answered: Shi Company is going through a Chapter…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A corporation is closing its business on December 31, 2021 due to financial incapacity after being hit by the Covid-19 pandemic. The accountant prepared the necessary documents for the closure such as the Annual Income Tax Return and Audited Annual Financial Statements. In the Audited Annual Financial Statements of the company, there was an ending inventory balance amounting to Php1,250,000.00. What is the tax implication of the ending inventory balance of the company?
A company going through a Chapter 7 bankruptcy has the following account balances: Cash Receivables (25% collectible) Inventory (worth $34,850) Land (worth $253,000) (secures note payable) Buildings (worth $275,000) (secures bonds payable) Salaries payable (4 workers owed equal amounts for last 2 weeks) Accounts payable Note payable (secured by land) Bonds payable (secured by building) Common stock Retained earnings How much will be paid to each of the following? Answer is complete but not entirely correct. Salaries payable Accounts payable Note payable Bonds payable $ 19,500 $ 41,420 X $ 205,000 $275,000 $ 49,000 69,000 109,000 195,000 390,000 19,500 109,000 205,000 490,000 290,000 (235,000)
Olds Company declares Chapter 7 bankruptcy. Following are the book values of the asset and liability accounts at that time. A bankruptcy expert estimates that administrative expense will total $15,000. Cash Accounts receivable Inventory Land (secures note A) Building (secures bonds) Equipment Accounts payable Taxes payable to government Note payable A Note payable B Bonds payable $ 27,000 63,000 73,000 203,000 403,000 123,000 (value unknown) 183,000 23,000 176,000 253,000 303,000 (valued at $31,000) (valued at $59,000) (valued at $163,000) (valued at $326,000) The holders of note payable B want to collect at least $101,200. Required: To achieve this goal, how much does the company have to receive in the liquidation of its equipment?
On April 10, 2022, fire damaged the office and warehouse of Sheffield Company. Most of the accounting records were destroyed, but the following account balances were determined as of March 31, 2022: Inventory (January 1, 2022), $80,000; Net Sales (January 1–March 31, 2022), $180,000; Purchases (January 1–March 31, 2022), $94,000.The company’s fiscal year ends on December 31. It uses a periodic inventory system.From an analysis of the April bank statement, you discover cancelled checks of $4,200 for cash purchases during the period April 1–10. Deposits during the same period totaled $18,500. Of that amount, 60% were collections on accounts receivable, and the balance was cash sales.Correspondence with the company’s principal suppliers revealed $12,400 of purchases on account from April 1 to April 10. Of that amount, $1,600 was for merchandise in transit on April 10 that was shipped FOB destination.Correspondence with the company’s principal customers produced acknowledgments of credit…
Addison Corporation is currently going through a Chapter 11 bankruptcy. The company has the following account balances for the current year. Prepare an income statement for this organization. The effective tax rate is 20 percent (realization of any tax benefits is anticipated).
On April 10, 2022, fire damaged the office and warehouse of Sheffield Company. Most of the accounting records were destroyed, but the following account balances were determined as of March 31, 2022: Inventory (January 1, 2022), $80,000; Net Sales (January 1–March 31, 2022), $180,000; Purchases (January 1–March 31, 2022), $94,000.The company’s fiscal year ends on December 31. It uses a periodic inventory system.From an analysis of the April bank statement, you discover cancelled checks of $4,200 for cash purchases during the period April 1–10. Deposits during the same period totaled $18,500. Of that amount, 60% were collections on accounts receivable, and the balance was cash sales.Correspondence with the company’s principal suppliers revealed $12,400 of purchases on account from April 1 to April 10. Of that amount, $1,600 was for merchandise in transit on April 10 that was shipped FOB destination.Correspondence with the company’s principal customers produced acknowledgments of credit…
Required Information [The following information applies to the questions displayed below.] Jayhawk Company reports current E&P of $310,000 and a deficit in accumulated E&P of ($282,500). Jayhawk distributed $505,000 to its sole shareholder, Rock, on the last day of the year. Rock's tax basis in the Jayhawk stock before the distribution is $128,750. Note: Leave no answer blank. Enter zero if applicable. Negative amount should be Indicated by a minus sign. c. What is Jayhawk's balance in accumulated E&P on the first day of next year? V Balance in accumulated E&P at the beginning of next year
Bonita Corporation experienced a fire on December 31, 2022, in which its financial records were partially destroyed. It has been able to salvage some of the records and has ascertained the following balances. December 31, 2022 December 31, 2021 Cash $33,500 $ 10,000 Accounts receivable (net) 75,500 130,000 Inventory 194,000 177,000 Accounts payable 51,500 87,000 Notes payable 33,000 58,500 Common stock, $100 par 412,000 412,000 Retained earnings 103,000 100,000 Additional information: 1. The inventory turnover is 2.6 times. 2. The return on common stockholders' equity is 30%. The company had no additional capital accounts. 3. The accounts receivable turnover is 8.7 times. 4. The return on assets is 12.5%. 5. Total assets at December 31, 2021, were $612,000. Compute the following for Bonita Corporation. (a) Cost of goods sold for 2022 $ 482,300 (b) Net credit sales for 2$ 893925 (c) Net income for 2022 2$ 154050 (d) Total assets at December 31, 2022 2$ The answer to (d) is not 1,232,400
Serene Company purchases fountains for its inventory from Kirkland Inc. The following transactions take place during the current year. A. On July 3, the company purchases 30 fountains for $1,700 per fountain, on credit. Terms of the purchase are 2/10, n/30, invoice dated July 3. B. On August 3, Serene does not pay the amount due and renegotiates with Kirkland. Kirkland agrees to convert the debt owed into a short-term note, with an 10% annual interest rate, payable in two months from August 3. C. On October 3, Serene Company pays its account in full. Record the journal entries to recognize the initial purchase, the conversion, and the payment. If an amount box does not require an entry, leave it blank. When required, round your answers to the nearest dollar. July 3 fill in the blank 2 fill in the blank 3 fill in the blank 5 fill in the blank 6 Aug. 3 fill in the blank 8 fill in the blank 9 fill in the blank 11 fill in the blank 12 Oct. 3 fill in the blank 14…
Holmes Corporation has filed a voluntary petition with the bankruptcy court in hopes of reorganizing. A statement of financial affairs has been prepared for the company showing these debts: Liabilities with priority:Salaries payable . . . . . . . . . $ 18,000Fully secured creditors:Notes payable (secured by land and buildings valued at $84,000) . . 70,000Partially secured creditors:Notes payable (secured by inventory valued at $30,000) . . . . . . . . . 140,000Unsecured creditors:Notes payable . . . . . . . . . . . . 50,000 Accounts payable . . . . . 10,000Accrued expenses . . . . . . . . . . . . 4,000 Holmes has 10,000 shares of common stock outstanding with a par value of $5 per share. In addition, it is currently reporting a deficit balance of $132,000.Company officials have proposed the following reorganization plan:∙ The company’s assets have a total book value of $210,000, an amount considered to be equal to fair value. The reorganization value of the assets as a whole,…
A. Sold the building for $120,000 and paid the loan. B. Collected $10,000 from the accounts receivable. Remainder is uncollectible C. Sold the equipment for $8,000 D. Paid the salaries and taxes payable. E. Sold all remaining inventory for $8,000 F. Paid liquidation costs. G. Distributed settlement to remaining creditors Bottomless Pit Statement of Realization and Liquidation For the Month Ended May 31, 200X Non Cash Loan Salary Liq Costs Taxes Accounts Cash Assets Payable Payable Payable Payable Payable Deficit Book Balances May 1 $2,000 $188,000 $115,000 $5,000 $5,000 $10,000 $80,000 ($25,000) Sold building and paid loan Collected accounts receivable Sold equipment Paid salaries and taxes Sold inventory Paid liquidation costs Paid settlement to creditors Book balances May 31
Use the following information to answer Question 21 and 22. Harrison Company has a loan receivable with a carrying value of $15,000 at December 31, 2019. On January 3, 2020, the borrower, Thomas Clark Imports, declares bankruptcy, and Harrison estimates that it will collect only 60% of the loan balance. 21) Which of the following entries would Harrison make to record the impairment under IFRS? a) Loan Receivable 9,000 Impairment Loss 9,000 b) Loan Recovery Expense 6,000 Loan Receivable 6,000 c) Impairment Loss 9,000 Loan Receivable 9,000 d) Bad Debt Expense 6,000 Provision for Doubtful Accounts 6,000 22) Assume that on January 5, 2021, Harrison learns that Thomas Clark Imports has emerged from bankruptcy. As a result, Harrison now estimates that all…

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