Mannheim Corporation is ready to emerge from Chapter 11 bankruptcy under a reorganization plan accepted by all parties. Mannheim's balance sheet showsVanous avsets $2,600 000TOTALSelect oneOPrepetition labies fully securedPrepetition ablities subject to compromePotpetition abiles$2.500.000 TOTALa $250,000b. 178,000Common stockRetained deficitThere are no excess assets. The present value of future cash flows from the reorganized company's operating assets is $2.470,000 The creditors represented by the prepetition liabilities subject to compromise agree totake $754,000 in 7 percent notes payable plus 70 percent of the common stock as settlement. The old shareholders will have 30 percent of the common stock.The reorganized company's common stock is valued at$130,000d$650.000$520,0001,768,0001,066.000260.000(1014000)$2600000

The correct solution is:1,014,000

Mannheim Corporation is ready to emerge from Chapter 11 bankruptcy under & ANIBER nous es 125600000 Preption Subbes y secured TOTAL $2.400.000 TOTAL There are no excess assets. The present value of future cash flows from the reorganued company's operating assets is $2.470,000 The creditors represented by the prepetition lublinies subject to compromise agree take $754.000 in 7 percent notes payable plus 70 percent of the common stock as settlement. The old shareholders will have 30 percent of the common stock The reorganized company's common stock is valued at Select one O Preption lubicies subject to comprom 1000 $260.000 b. 178,000 $130.000 4 $450.000 260.000 104.000 $200.000

Mannheim Corporation is ready to emerge from Chapter 11 bankruptcy under & ANIBER nous es 125600000 Preption Subbes y secured TOTAL $2.400.000 TOTAL There are no excess assets. The present value of future cash flows from the reorganued company's operating assets is $2.470,000 The creditors represented by the prepetition lublinies subject to compromise agree take $754.000 in 7 percent notes payable plus 70 percent of the common stock as settlement. The old shareholders will have 30 percent of the common stock The reorganized company's common stock is valued at Select one O Preption lubicies subject to comprom 1000 $260.000 b. 178,000 $130.000 4 $450.000 260.000 104.000 $200.000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

What is the loss on realization resulting to a capital deficiency to a personnally solvent partnerassume that NCA was sold at 1,700,000
54. ABC Company is in a capital deficiency position and is considering the possibility of liquidation. An analysis of the assets and liabilities of the entity is provided: Assets at net realizable value (pledged against liabilities of P150,000) P250,000 Assets at net realizable value (pledged against liabilities of P260,000) 100,000 Assets at net realizable value (not pledged against any liabilities) 160,000 Liabilities with priority 85,000 Unsecured creditors 400,000 Round off the estimated recovery percentage to XX.XX%, if needed. How much is the estimated payment to partially secured creditors?
A statement of financial affairs created for an insolventcorporation that is beginning the process of liquidation disclosesthe following data (assets are shown at net realizable values): Assets pledged withfully secured creditors $ 220,000 Fully securedliabilities 160,000 Assets pledged withpartially secured creditors 390,000 Partially securedliabilities 510,000 Assets notpledged 310,000 Unsecuredliabilities with priority 182,800 Accounts payable(unsecured) 400,000 a. This company owes $13,000 to an unsecured creditor (withoutpriority). How much money can this creditor expect to collect? b. This company owes $120,000 to a bank on a note payable that issecured by a security interest attached to property with anestimated net realizable value of $90,000. How much money can thisbank expect to collect?
D
When the Beacon Computer Company filed for bankruptcy under CCAA, it had the following balance sheet information: Liquidating Value Total assets $30,400 Equity Claims Trade credit Secured mortgage notes Senior debentures Junior debentures Trade credit Secured mortgage notes Senior debentures Junior debentures Equity $ 6,700 9,900 11,900 16,900 -15,000 Assuming there are no legal fees associated with the bankruptcy, as a trustee, what distribution of liquidating value do you propose? (Do not leave any empty spaces; input a 0 wherever it is required. Enter the answers in dollars. Omit $ sign in your response.) Distribution of liquidating value $
None
The Larisa Company is exiting bankruptcy reorganization with the following account balances: Net Book Value Fair Value Receivables $ 80,000 $ 90,000 Inventory 200,000 210,000 Buildings 300,000 400,000 Liabilities 800,000 800,000 Common stock 130,000 Additional paid-in capital 20,000 Retained earnings (deficit) (370,000) Larisa Company’s assets have a $760,000 reorganization value. As part of the reorganization plan, the company’s owners transferred 80 percent of the outstanding stock to the creditors in exchange for a $500,000 reduction in the liabilities. Required: Prepare the journal entry (or entries) necessary to adjust the company’s records to fresh start accounting. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
1. Done Partnership is undergoing liquidation. Information on Done is as follows: 20,000 Accounts payable 60,000 Payable to B 10,000 A; Capital (60%) 120,000 B, Capital (40%) 290,000 Cash 30,000 Accounts receivable Receivable from A 20,000 250,000 Inventory Equipment, net 200,000 Total 500,000 Total Liab. & Equity 500,000
Liquidation based Valuation WWW Inc. Recently has had financial difficulty and is being liquidated. The firm has athe liquidation value of P2,000,000 – P800,000 from the fixed assets that served as collateral for themortgage bonds and P1,200,000 from all other assets ( all prior claims have been satisfied) TheThe firm current capital structure is as follows:Unsecured bonds - P1,000,000Mortgaged bonds - P800,000Preference shares - P200,000Ordinary shares - P500,000How much will the ordinary shareholders from the Liquidation?
S Olds Company declares Chapter 7 bankruptcy. The following are the book values of the asset and liability accounts at that time. A bankruptcy expert estimates that administrative expense will total $31,000. Cash Accounts receivable Inventory Land (secures note A) Building (secures bonds) Equipment Accounts payable Taxes payable to government Note payable A Note payable B Bonds payable $ 43,000 79,000 89,000 Amount to be received 219,000 (valued at $47,000) (valued at $75,000) (valued at $179,000) 419,000 (valued at $358,000) 139,000 (value unknown) 199,000 39,000 208,000 269,000 319,000 The holders of note payable B want to collect at least $134,500. To achieve this goal, how much does the company have to receive in the liquidation of its equipment? $ 238,500
Kansas City Corporation holds three assets when it comes out of Chapter 11 bankruptcy: Book Value Fair Value Inventory $86000 $50000 Land and buildings 250000 400000 Equipment 123000 110000 The company has a reorganization value of $600,000.a. Describe the rules to determine whether to apply fresh start accounting to Kansas City.b. If fresh start accounting is appropriate, how will this company’s assets be reported?c. If a Goodwill account is recognized in a reorganization, where should it be reported? What happens to this balance?
Fast answer please