A company preparing for a Chapter 7 liquidation has the following liabilities: Note payable A of $108,000 secured by land having a book value of $59,000 and a fair value of $79,000. • Note payable B of $138,000 secured by a building having a $69,000 book value and a $49,000 fair value. • Note payable C of $69,000, unsecured. • Administrative expenses payable of $29,000. Accounts payable of $129,000. Income taxes payable of $39,000. The company also has these other assets: Cash of $19,000. Inventory of $118,000 but with fair value of $69,000. Equipment of $108,000 but with fair value of $59,000. 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 $108,000 secured by land having a book value of $59,000 and a fair value of $79,000. • Note payable B of $138,000 secured by a building having a $69,000 book value and a $49,000 fair value. • Note payable C of $69,000, unsecured. • Administrative expenses payable of $29,000. Accounts payable of $129,000. Income taxes payable of $39,000. The company also has these other assets: Cash of $19,000. Inventory of $118,000 but with fair value of $69,000. Equipment of $108,000 but with fair value of $59,000. How much will each of the company's liabilities be paid at liquidation?

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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Question

A company preparing for a Chapter 7 liquidation has the following liabilities:
• Note payable A of $108,000 secured by land having a book value of $59,000 and
a fair value of $79,000.
•
Note payable B of $138,000 secured by a building having a $69,000 book value
and a $49,000 fair value.
• Note payable C of $69,000, unsecured.
• Administrative expenses payable of $29,000.
• Accounts payable of $129,000.
Income taxes payable of $39,000.
The company also has these other assets:
Cash of $19,000.
Inventory of $118,000 but with fair value of $69,000.
Equipment of $108,000 but with fair value of $59,000.
How much will each of the company's liabilities be paid at liquidation?

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