A statement of financial affairs created for an insolvent corporation that is beginning the process of liquidation discloses the following data. The assets are shown at net realizable values.         Assets pledged with fully secured creditors $ 212,000 Fully secured liabilities   156,000 Assets pledged with partially secured creditors   386,000 Partially secured liabilities   502,000 Assets not pledged   306,000 Unsecured liabilities with priority   208,400 Accounts payable (unsecured)   396,000     The company owes $9,000 on an account payable to an unsecured creditor (without priority). How much money can this creditor expect to collect? The company owes $112,000 to a bank on a note payable that is secured by a security interest attached to property with an estimated net realizable value of $86,000. How much money can the bank expect to collect?           a. Expected amount by creditor   b. Expected amount by bank

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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A statement of financial affairs created for an insolvent corporation that is beginning the process of liquidation discloses the following data. The assets are shown at net realizable values.

 

     
Assets pledged with fully secured creditors $ 212,000
Fully secured liabilities   156,000
Assets pledged with partially secured creditors   386,000
Partially secured liabilities   502,000
Assets not pledged   306,000
Unsecured liabilities with priority   208,400
Accounts payable (unsecured)   396,000
 

 

  1. The company owes $9,000 on an account payable to an unsecured creditor (without priority). How much money can this creditor expect to collect?

  2. The company owes $112,000 to a bank on a note payable that is secured by a security interest attached to property with an estimated net realizable value of $86,000. How much money can the bank expect to collect?

 
 
     
a. Expected amount by creditor  
b. Expected amount by bank
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