Chesterfield Company holds cash of $69,000, inventory worth $128,000, and a building worth $149,000. Unfortunately, the companyalso has accounts payable of $199,000, a note payable of $99,000 (secured by the inventory), liabilities with priority of $26,600, and abond payable of $188,000 (secured by the building).In a Chapter 7 bankruptcy, how much money should the holder of the bond expect to receive?Answer is complete but not entirely correct.Total amount received by bond holders $ 149,000 XB

In Chapter 7 bankruptcy creditors, with collateral get paid first from the money raised by selling…

Answered: Chesterfield Company holds cash of…

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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APA and Co., Inc. purchased a Cadillac automobile with little cash down and signed a note, secured by the Cadillac, for 48 easy monthly payments. When the company files for bankruptcy, the balance due on the Cadillac amount to P6,000,000. The car has a book value of P8,000,000 and a net realizable value of P4,000,000. The unsecured creditors of APA and Co. can expect to receive 50 percent of their claims. In the liquidation, the bank that holds the note on the Cadillac should receive:
Xavier Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $27,200 in free cash. The following debts, totaling $48,050, remain: Government claims to unpaid taxes $ 8,000 Salary during last month owed to Mr. Key (not an officer) 19,825 Administrative expenses 4,450 Salary during last month owed to Ms. Rankin (not an officer) 7,225 Unsecured accounts payable 8,550 Indicate how much money will be paid to the creditor associated with each debt.
Daniel Sandhill is the sole shareholder of Sandhill Inc., which is currently under bankruptcy court protection. As a debtor in possession, he has negotiated a revised loan agreement with United Bank. Sandhill Inc.’s $696,000, 10-year, 11% note issued at par was refinanced with a $696,000, 10-year, 4% note. Assume the market rate of interest is 11% at the refinancing date. Both Sandhill and United Bank prepare financial statements in accordance with IFRS 9. Prepare the journal entries to record this refinancing (1) on the books of Sandhill Inc. and (2) on the books of United Bank. Assume for simplicity that United Bank had not previously recognized any impairment, although under the expected loss method, it is likely that it would have recognized some loss. (Use the amounts arrived at from using the time value of money tables for the journal entries.)
Shi Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $26,600 in free cash. The following debts, totaling $45,050, 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 $ 7,400 19,225 3,850 Indicate how much money will be paid to the creditor associated with each debt. Types of Debts Administrative expenses Salary during last month owed to Mr. Key and Ms. Rankin 6,625 7,950 Answer is complete but not entirely correct. Amounts 3,850 $12.850 $ 3,716 $26,600 Government claims to unpaid taxes
Shi Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $26,000 in free cash. The following debts, totaling $42,050, 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 Required: Indicate how much money will be paid to the creditor associated with each debt. Types of Debts Administrative expenses Amounts $ 3,250 Salary during last month owed to Mr. Key and Ms. Rankin Government claims to unpaid taxes 0 $ 6,800 18,625 3,250 5,890 7,350
How much is the estimated recovery percentage?
lota Corporation has suffered losses for several years, and its debts total $495,000; lota's assets are valued at only $410,000. lota's creditors agree to reduce lota's debts by one-half in order to permit the corporation to continue to operate. lota's NOL carryover is $165,000. Requirements a. What impact does the reduction in debt have on lota's NOL? b. Is lota required to report any income? Requirement a. What impact does the reduction in debt have on lota's NOL? The total debt reduction is The debt reduction due to insolvency is The NOL carryover The NOL carryover after the debt reduction will be Requirement b. Is lota required to report any income? Old will report income of This is because
None
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?
Shi Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $27,500 in free cash. The following debts, totaling $49,550, remain: Government claims to unpaid taxes $ 8,300 Salary during last month owed to Mr. Key (not an officer) 20,125 Administrative expenses 4,750 Salary during last month owed to Ms. Rankin (not an officer) 5,960 Unsecured accounts payable 8,850 Required: Indicate how much money will be paid to the creditor associated with each debt.
Kheena Company filed a voluntary bankruptcy petition on June 1, 2022 and the statement of affairs reflects the following amounts: Assets pledged with fully secured creditors has a book value of P160,000 while the estimate( realizable value amounted to P190,000. Assets pledged with partially secured creditors has estimated realizable value of P60,000 with book value of P90,000. But the free assets amounted to P140,000 and P200,00 for the realizable and book value, respectively. Liabilities were as follows: Liabilities with priority 20,000 Fully Secured creditors 130,000 Partially secured creditors 100,000 Unsecured creditors 260,000 Q2. If the assets are converted into cash at the estimated realizable values, what is the ERP for partially secured creditors?
ASAP

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