Assume that the reorganized "new" capital structure must be 3/4 debt and 1/4 common equity, with $1,000,000 of the new debt subordinated to senior debt. After the fair distribution of the new securities under the reorganization: O a. The "old" Senior Debt of S2,000,000 in the last pre-bankruptcy balance sheet will after the reorganization end co3.000.000

Assume that the reorganized "new" capital structure must be 3/4 debt and 1/4 common equity, with $1,000,000 of the new debt subordinated to senior debt. After the fair distribution of the new securities under the reorganization: O a. The "old" Senior Debt of S2,000,000 in the last pre-bankruptcy balance sheet will after the reorganization end co3.000.000

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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Firm BBB, under Chapter 11 bankruptcy proceedings, has an estimated going-concern reorganization value of $10.0 million. The last pre-bankruptcy balance sheet of the firm is below (this shows the "old" capital structure). Assume that there are no other claims from any party. LAST PRE-BANKRUPTCY BALANCE SHEET ASSETS (in $) 7,000.000 13,000,000 $20,000,000 Current Assets Fixed Assets TOTAL ASSETS LIABILITIES and NET WORTH (in $) Senior Debt Subordinated Debt Common Stockholders Equity TOTAL LIABILITIES and NET WORTH $20,000,000 6,000.000 9,000,000 5,000,000 Assume that the reorganized "new capital structure must be 60% debt and 40% common equity, with 54,000,000 of the new debt subordinated to senior debt. After the fair distribution of the new securities under the reorganization Qa The old" Seror Debt of 56.000 .000 in the last pre-bankruptcy balance sheet will, after reorganization, rece (among othersi new Suboritinated Debit of S4.000.000 OD The fold Senior Debt of S.000.000 in the…
WANTED Corporation filed bankruptcy on July 1, 2011 and some of the infomation below were taken from its statement of affairs. Estimated Realizable Value P300, 000 Book Value Assets: Assets pledge with fully secured creditors Assets pledge with partially secured creditors P250, 000 180, 000 120, 000 Liabilities: Fully secured creditors Partially secured creditors Unsecured creditors with priority P280, 000 200, 000 100, 000 Unsecured creditors 400, 000 6. Assumed that the assets are converted to cash at the estimated realizable values, what is the total estimated realizable value of the free assets if the partially secured creditors received P176, 000? A. P436, 000 в. Р316, 000 c. P336, 000 D. P416, 000
Mannheim Corporation is ready to emerge from Chapter 11 bankruptcy under a reorganization plan accepted by all parties. Mannheim's balance sheet shows Vanous avsets $2,600 000 TOTAL Select one O Prepetition labies fully secured Prepetition ablities subject to comprome Potpetition abiles $2.500.000 TOTAL a $250,000 b. 178,000 Common stock Retained deficit There are no excess assets. The present value of future cash flows from the reorganized company's operating assets is $2.470,000 The creditors represented by the prepetition liabilities subject to compromise agree to take $754,000 in 7 percent notes payable plus 70 percent of the common stock as settlement. The old shareholders will have 30 percent of the common stock. The reorganized company's common stock is valued at $130,000 d$650.000 $520,000 1,768,000 1,066.000 260.000 (1014000) $2600000
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Alitech Corporation is liquidating under Chapter 7 of the Bankruptcy Act. The accounts of Alitech at the time of filing are summarized as follows: Estimated Realizable Book Value ValueCash $ 10,000 $ 10,000Accounts receivable-net 60,000 50,000Inventory 110,000 65,000Land 20,000 35,000Building 200,000 126,000Goodwill…
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