Lucian Pty Ltd (Lucian) is a company hosting expensive scenic cruises around Europe. Ernest Jones-Armstrong and his wife, Isla are its directors. A few months ago, Lucian borrowed $1.7 million from the ABC Bank. The security for that loan was a mortgage over the company's most valuable asset, a mansion in inner-Melbourne worth $2.5 million. Under that loan agreement, the ABC Bank has the right to take possession of the building and sell it if Lucian stops paying the loan repayments. Lucian also has other secured creditors and numerous unsecured creditors. Please answer the following questions: 3a) -- Mag SENA -- If the ABC Bank placed Lucian into a Receivership, could the receiver sell the mansion for any price which a potential buyer offered? Explain. Marks Marks

Lucian Pty Ltd (Lucian) is a company hosting expensive scenic cruises around Europe. Ernest Jones-Armstrong and his wife, Isla are its directors. A few months ago, Lucian borrowed $1.7 million from the ABC Bank. The security for that loan was a mortgage over the company's most valuable asset, a mansion in inner-Melbourne worth $2.5 million. Under that loan agreement, the ABC Bank has the right to take possession of the building and sell it if Lucian stops paying the loan repayments. Lucian also has other secured creditors and numerous unsecured creditors. Please answer the following questions: 3a) -- Mag SENA -- If the ABC Bank placed Lucian into a Receivership, could the receiver sell the mansion for any price which a potential buyer offered? Explain. Marks Marks

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Connor Ltd. is a large private company owned by the Connor family. It operates a manufacturing business in northern Ontario. It has applied to the ICB bank for a new loan of $100 million to expand its manufacturing facilities. You are a financial analyst with ICB. You have just been given an assignment to analyze Connor's Year 7 financial statements and to identify any concerns about Connor's performance and financial condition. The following are financial statements for Connor Ltd. for Year 7: Asset Cash Accounts receivable Inventory Property, plant and equipment Total Assets Liabilities and Shareholders' Equity Accounts payable Other accrued liabilities Bonds payable Common shares BALANCE SHEETS (In 000s) Retained earnings Total Liabilities and Shareholders' Equity Sales Cost of goods sold Gross margin Depreciation expense Other expenses Income tax expense Net income INCOME STATEMENT (In 000s) Year 7 $ 2,000,000 (1, 370, 000) 630, 000 (48,000) (416, 000) (66,400) 99, 600 $ Year 7 $…
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Triangle Ltd specialises in building high quality executive flats in city centres. On 1 March 20X6 it sells a plot of building land to Finance plc, an unconnected company, for £1.5m. Triangle Ltd retains rights of access and supervision over the plot, the right to build on this land until 28 February 20X8 and the right to buy the plot back again on that date for £1.9m. On 1 March 20X6 the plot is valued at £2.5m. Explain how this sale transaction would be dealt with in Triangle Ltd’s financial statements for the year ended 28 February 20X7.
Seejoy is a famous football club but has significant cash flow problems. The directors and shareholders wish to take steps to improve the club’s financial position. The following proposal was drafted in an attempt to improve the cash flow of the club. However, the directors need advice about its implications. Player registrations The club capitalises the unconditional amounts (transfer fees) paid to acquire players. The club proposes to amortise the cost of the transfer fees over 10 years instead of the current practice, which is to amortise the cost over the duration of the player’s contract. The club has sold most of its valuable players during the current financial year but still has two valuable players under contract. If Seejoy wins the national football league, then a further $5 million will be payable to the two players’ former clubs. Seejoy is currently performing very poorly in the league. Required: Discuss how the above proposal would be dealt with in the financial…
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David and Rita Richardson saved all their married life to open a homestay named T-Lights. They invested RM100,000 of their own money and the corporation issued common stock to them. The business then got a RM100,000 bank loan for the RM200,000 needed to get started. The corporation bought a run-down old colonial home in Ipoh for RM80,000. It cost another RM50,000 to renovate. They found most of the furniture at antique shops and flea markets – total cost was RM20,000. Kitchen equipment cost RM10,000, and a Dell computer set cost RM2,000. Prior to the grand opening, the banker requests a report on their activities thus far. T-Lights’ bank statement shows a cash balance of RM38,000. They feel pretty good with that much net income in only six months. To better understand how well they are doing, they prepare the following statement for presentation to the bank: T-Lights Income Statement Six Months Ended 30 June 2020 Revenues: Investment by owner Bank loan RM100,000 100,000…
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