Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Chapter 13, Problem 35P
Olds Company declares Chapter 7 bankruptcy. The following are the asset and liability book values at that time. Administrative expenses are estimated to be $20,000:
| Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 32,000 | |
| 68,000 | (valued at $36,000) | |
| Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 78,000 | (valued at $64,000) |
| Land (secures note A) . . . . . . . . . . . . . . . . . . | 208,000 | (valued at $168,000) |
| Building (secures bonds) . . . . . . . . . . . . . . . | 408,000 | (valued at $336,000) |
| Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 128,000 | (value unknown) |
| Accounts payable . . . . . . . . . . . . . . . . . . . . . | 188,000 | |
| Taxes payable to government . . . . . . . . . . . | 28,000 | |
| Note payable A . . . . . . . . . . . . . . . . . . . . . . . | 186,000 | |
| Note payable B . . . . . . . . . . . . . . . . . . . . . . . . | 258,000 | |
| Bonds payable . . . . . . . . . . . . . . . . . . . . . . . . | 308,000 |
The holders of note payable B want to collect at least $129,000. To achieve this goal, how much does the company have to receive in the liquidation of its equipment?
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Olds Company declares Chapter 7 bankruptcy. The following are the asset and liability book values at that time. Administrative expenses are estimated to be $20,000:
The holders of note payable B want to collect at least $129,000. To achieve this goal, how much does the company have to receive in the liquidation of its equipment?
Olds Company declares Chapter 7 bankruptcy. The following are the asset and liability book values at that time. Administrative expenses are estimated to be $20,000:
Cash . . . . . . . . . . . . . . . . . . . . $ 32,000Accounts receivable . . . . . . . . 68,000 (valued at $36,000)Inventory .. 78,000 (valued at $64,000)Land (secures note A) . . . . . . 208,000 (valued at $168,000)Building (secures bonds) . . . . 408,000 (valued at $336,000)Equipment . . . . . . . . . . . . . 128,000 (value unknown)Accounts payable . . . . . . . . . 188,000Taxes payable to government .. 28,000Note payable A . . . . . . . . . . .. 186,000Note payable B . . . . . . . . . . . 258,000Bonds payable . . . . . . . . . . . 308,000
The holders of note payable B want to collect at least $129,000. To achieve this goal, how much does the company have to receive in the liquidation of its equipment?
Ataway Company has severe financial difficulties and is considering filing a bankruptcy petition. At this time, it has the following assets and liabilities. The assets are stated at net realizable value.
Assets (pledged against debts of $70,000) . . . . . . . . . . . . . . . . $116,000Assets (pledged against debts of $130,000) . . . . . . . . . . . . . . . . . 50,000Other assets . . . . . . . . . . . . . . . 80,000Liabilities with priority . . . . . . . 42,000Other unsecured creditors . . . 200,000
In a liquidation, how much money would be paid on the partially secured debt?
Chapter 13 Solutions
Advanced Accounting
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