Mannheim Corporation is ready to emerge from Chapter 11 bankruptcy under a reorganization plan accepted by all parties. Mannheim's balance sheet showsVanous avsets $2,600 000TOTALSelect oneOPrepetition labies fully securedPrepetition ablities subject to compromePotpetition abiles$2.500.000 TOTALa $250,000b. 178,000Common stockRetained deficitThere 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 totake $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$130,000d$650.000$520,0001,768,0001,066.000260.000(1014000)$2600000

The correct solution is:1,014,000

Answered: Mannheim Corporation is ready to emerge…

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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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…
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…
A statement of realization and liquidation has been prepared for the RESTLESS Corporation.  The following information is available:Assets to be realized- P60,000                Liabilities assumed- P50,000Assets acquired- P40,000               Liabilities not liquidated- P40,000Assets realized- P55,000                Liabilities to be Liquidated- P80,000Assets not realized- P15,000               Liabilities liquidated- P60,000Supplementary credits- P110,000               Supplementary Charges- P97,000How much is shareholders’ equity, beg. assuming that the cash balance, ending amounted to P50,000? CHOICES: P92,000 P55,000 P118,000 P12,000
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A statement of realization and liquidation has been prepared for the RESTLESS Corporation. The following information is available:Assets to be realized- P60,000 Liabilities assumed- P50,000Assets acquired- P40,000 Liabilities not liquidated- P40,000Assets realized- P55,000 Liabilities to be Liquidated- P80,000Assets not realized- P15,000 Liabilities liquidated- P60,000Supplementary credits- P110,000 Supplementary Charges- P97,000How much is the net increase (decrease) in retained earnings?
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