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A company preparing for a Chapter 7 liquidation has the following liabilities: • Note payable A of $132,000 secured by land having a book value of $71,000 and a fair value of $91,000. • Note payable B of $162,000 secured by a building having a $81,000 book value and a $61,000 fair value. • Note payable C of $81,000, unsecured. Administrative expenses payable of $41,000. • Accounts payable of $141,000. • Income taxes payable of $51,000. The company also has these other assets: Cash of $12,800. • Inventory of $142,000 but with a net realizable value of $81,000. • Equipment of $132,000 but with a net realizable value of $71,000. How much will each of the company's liabilities be paid at liquidation?

A company preparing for a Chapter 7 liquidation has the following liabilities: • Note payable A of $132,000 secured by land having a book value of $71,000 and a fair value of $91,000. • Note payable B of $162,000 secured by a building having a $81,000 book value and a $61,000 fair value. • Note payable C of $81,000, unsecured. Administrative expenses payable of $41,000. • Accounts payable of $141,000. • Income taxes payable of $51,000. The company also has these other assets: Cash of $12,800. • Inventory of $142,000 but with a net realizable value of $81,000. • Equipment of $132,000 but with a net realizable value of $71,000. How much will each of the company's liabilities be paid at liquidation?

FINANCIAL ACCOUNTING
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 company preparing for a Chapter 7 liquidation has the following liabilities: • Note payable A of $132,000 secured by land having a book value of $71,000 and a fair value of $91,000. • Note payable B of $162,000 secured by a building having a $81,000 book value and a $61,000 fair value. Note payable C of $81,000, unsecured. ● • Administrative expenses payable of $41,000. • Accounts payable of $141,000. ● • Income taxes payable of $51,000. The company also has these other assets: Cash of $12,800. Inventory of $142,000 but with a net realizable value of $81,000. ● ● Equipment of $132,000 but with a net realizable value of $71,000. How much will each of the company's liabilities be paid at liquidation?
Transcribed Image Text:A company preparing for a Chapter 7 liquidation has the following liabilities: • Note payable A of $132,000 secured by land having a book value of $71,000 and a fair value of $91,000. • Note payable B of $162,000 secured by a building having a $81,000 book value and a $61,000 fair value. Note payable C of $81,000, unsecured. ● • Administrative expenses payable of $41,000. • Accounts payable of $141,000. ● • Income taxes payable of $51,000. The company also has these other assets: Cash of $12,800. Inventory of $142,000 but with a net realizable value of $81,000. ● ● Equipment of $132,000 but with a net realizable value of $71,000. How much will each of the company's liabilities be paid at liquidation?
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