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Peltzer Manufacturing is experiencing financial difficulties. Rather than entering into a lengthy bankruptcy proceeding, the company has reached an agreement with its long-term creditors to restructure various loans. The restructured loans are described below.Loan A—This 12% debt has a principal balance of $4,000,000 and accrued interest of $80,000. Under the restructuring agreement, $500,000 of debt would be forgiven, and the balance of the amounts due would be refinanced at a rate of 10% with monthly installment payments of $50,000 and a term of eight years. Assets with a net realizable value of $2,500,000 would also be pledged as additional security against the restructured loan.Loan B—This debt has a principal balance of $1,000,000 and accrued interest of $25,000. Under the restructuring agreement, the accrued interest would be forgiven, and the principal amount would be exchanged for preferred stock with a par value of $500,000 and a fair value of $900,000.Loan C—This 12% debt has…

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Check my work Shi Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $25,900 in free cash. The following debts, totaling $41,550, remain: Government claims to unpaid taxes Salary during last month owed to Mr. Key (not an officer) Administrative expenses Salary during last month owed to Ms. Rankin (not an officer) Unsecured accounts payable $ 6,700 18,525 3,150 Fook 5,925 7,250 "rint erences Indicate how much money will be paid to the creditor associated with each debt. Types of Debts + Amounts Mc Graw Hill MAY dtv SOUTARE * F2 14 E7 F3 F4 FS M5 23 2$ % & 2 3 4 5 7 9 W E T. Y S F G K C V alt mmand command option V

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What are possible reasons for a company with $20 million worth of assets that files for chapter 7 bankruptcy and a secured creditor with claims of over $100 million and the building as a secuirty end up with nothing?

Financial Difficulty: The “Going-Concern” Problem. Pitts Company has experienced significant financial difficulty. Current liabilities exceed current assets by $1 million, cash has decreased to $10,000, the interest on the long-term debt has not been paid, and a customer has brought a lawsuit against Pitts for $500,000 on a product liability claim. Significantquestions concerning the going-concern status of the company exist. The lawsuit and information about the going-concern status have been appropriately described in footnote 3 to the financial statements.Required:a. Draft AOW’s report, assuming that the auditors decide that an unmodified opinion instead of a disclaimer of opinion is appropriate in the circumstances.b. Draft AOW’s report, assuming that the auditors decide the uncertainties are so serious that they do not wish to express an opinion on Pitts’ financial statements

Ataway Company has suffered severe financial difficulties and is considering filing a bankruptcy petition. It has the following assets and liabilities. The assets are stated at net realizable value.         Assets (pledged against debts of $74,000) $ 124,000 Assets (pledged against debts of $138,000)   54,000 Other assets   84,000 Liabilities with priority   76,400 Other unsecured creditors   204,000     In a liquidation, how much money would be paid on the partially secured debt?

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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 $76,000) $128,000 Assets (pledged against debts of $142,000) 56,000 Other assets Liabilities with priority Other unsecured creditors 86,000 65,000 206,000 In a liquidation, how much money would be paid on the partially secured debt?

Telstar Co. had severe financial difficulties and was considering the possibility of filing a bankruptcy petition. At that time, the company had the following assets (stated at net realizable value) and liabilities. Assets (pledged against debts of $91,000)                         150,800 Assets (pledged against debts of $169,000)                         65,000 Other assets                                                                            104,000 Liabilities with priority                                                               54,600 Unsecured creditors                                                                 60,000 A. Prepare a schedule to show the amount of total assets available to pay liabilities with priority and unsecured creditors B. Prepare a schedule to show the amount of assets that are available for unsecured creditors after payment of liabilities with priority C. Prepare a schedule to show the amount of total unsecured liabilities D. Prepare a schedule…

Saved Shi Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $26,800 in free cash. The following debts, totaling $46,050, remain: Government claims to unpaid taxes $ 7,600 Salary during last month owed to Mr. Key (not an officer) Administrative expenses 19,425 4,050 Salary during last month owed to Ms. Rankin (not an officer) Unsecured accounts payable 5,925 8,150 Required: Indicate how much money will be paid to the creditor associated with each debt. Types of Debts Amounts Administrative expenses $ 4,050 Salary during last month owed to Mr. Key and Ms. Rankin $ 25,350 Government claims to unpaid taxes $ 7,600 $ 0

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2.Chapter 11 When the Master Printing Company filed for bankruptcy, it filed under Chapter 11 of the U.S. bankruptcy code. Key information is shown here: Assets Claims     Mortgage bonds $27,000     Senior debentures 12,100     Junior debentures 8,500 Going concern value $37,500 Book equity −10,100 As a trustee, what reorganization plan would you accept? INTERMEDIATE(Questions 3–4) 3.Z-Score Fair-to-Midland Manufacturing, Inc. (FMM), has applied for a loan at True Credit Bank. Jon Fulkerson, the credit analyst at the bank, has gathered the following information from the company’s financial statements: Total assets $115,000 EBIT 7,900 Net working capital 4,100 Book value of equity 23,000 Accumulated retained earnings 19,600 Sales 112,000 The stock price of FMM is $31 per share and there are 7,800 shares outstanding. What is the Z-score for this company?

Jaez Corporation is in the process of going through a reorganization. As of December 31, 2024, the company’s accountant has determined the following information although the company is still several months away from emerging from the bankruptcy proceeding.   Net Book Value Fair Value Assets     Cash $ 31,000 $ 31,000 Inventory 53,000 55,000 Land 164,000 218,000 Buildings 228,000 268,000 Equipment 162,000 165,000   Allowed Claims Expected Settlement Liabilities as of the date of the order for relief     Accounts payable $ 131,000 $ 28,000 Accrued expenses 38,000 12,000 Income taxes payable 30,000 26,000 Note payable (due 2027, secured by land) 108,000 108,000 Note payable (due 2029) 178,000 88,000 Liabilities since the date of the order for relief     Accounts payable $ 68,000   Note payable (due 2026) 118,000   Stockholders' equity     Common stock $ 208,000   Deficit (241,000)   Required: Prepare the balance sheet for Jaez…

Problem 5-2. Notes payable and Debt restructuring Hope Company is experiencing financial difficulties due to the impact of the Pandemic on its business. In recent years, the company was forced to scale down its business operations and retrench a significant part of its work force. Also, it negotiated restructuring some of its borrowings with its creditors. The company was not able to pay the creditor as of 12/31/2022 and arranged restructuring with its creditors with the details as follows as of December 31, 2022:   Date Principal & Terms Status Mode of settlement 1/1/2020 3-year, 1,000,000 mortgage note. 10% interest, payable annually. Due immediately; only interest has been paid to date. Transfer the land used as security to the creditor. Cost of land P900,000, fair value P1.5 million 1/1/2021 2-year, 500,000 note. Ordinary shares of entity held as collateral. 12% interest, payable annually. Due immediately; Principal and interest for 2022 unpaid as of…

Which of the following statements about WorldCom is true?   a. WorldCom filed for Chapter 11 bankruptcy in 2002.     b. They overreported the line costs by recording them as liabilities.     c. It began in 1999 as Long Distance Discount Services, Inc.     d. Five techniques were used to cook its books.

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