A Company recently petitioned for bankruptcy and is now in the process ofpreparing a statement of affairs.The carrying values and estimated fair values of the assets of the Company are asfollows:Carrying Value Fair ValueCashP 8,000P 8,000Accounts Receivable 18,00012,000Inventory24,00014,000Land30,00028,000Building (net)72,00040,000Equipment (net)68,00032,000Total220,000134,000 Debts of the Company are as follows:Accounts payableP 24,000Wages Payable (all have priority)4,000Taxes payable4,000Notes payable (secured by receivable and inventory)48,000Interest on Notes Payable2,400Bonds Payable (secured by land and building)60,000Interest on bonds Payable2,800Total145,200What is the estimated amount that will be available for general unsecuredcreditors upon liquidation (net free assets) ?

amount will be available for general unsecured creditors upon liquidation is

A Company recently petitioned for bankruptcy and is now in the process of preparing a statement of affairs. The carrying values and estimated fair values of the assets of the Company are as follows: Carrying Value Fair Value Cash P 8,000 P 8,000 Accounts Receivable 18,000 12,000 Inventory 24,000 14,000 Land 30,000 28,000 Building (net) 72,000 40,000 Equipment (net) 68,000 32,000 Total 220,000 134,000

A Company recently petitioned for bankruptcy and is now in the process of preparing a statement of affairs. The carrying values and estimated fair values of the assets of the Company are as follows: Carrying Value Fair Value Cash P 8,000 P 8,000 Accounts Receivable 18,000 12,000 Inventory 24,000 14,000 Land 30,000 28,000 Building (net) 72,000 40,000 Equipment (net) 68,000 32,000 Total 220,000 134,000

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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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

A Company recently petitioned for bankruptcy and is now in the process of
preparing a statement of affairs.
The carrying values and estimated fair values of the assets of the Company are as
follows:
Carrying Value Fair Value
Cash
P 8,000
P 8,000
Accounts Receivable 18,000
12,000
Inventory
24,000
14,000
Land
30,000
28,000
Building (net)
72,000
40,000
Equipment (net)
68,000
32,000
Total
220,000
134,000

Debts of the Company are as follows:
Accounts payable
P 24,000
Wages Payable (all have priority)
4,000
Taxes payable
4,000
Notes payable (secured by receivable and inventory)
48,000
Interest on Notes Payable
2,400
Bonds Payable (secured by land and building)
60,000
Interest on bonds Payable
2,800
Total
145,200
What is the estimated amount that will be available for general unsecured
creditors upon liquidation (net free assets) ?

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