Marter Co. filed a bankruptcy petition and liquidated its noncash assets. Marter was paying forty cents on the dollar for unsecured claims. Keenan Co. held a mortgage of $150,000 on Marter's land which was sold for $110,000. The total amount of payment that Keenan should have received is calculated to be Select one: a.$150,000. b.$126,000. c.$44,000. d.$60,000. e.$110,000.

Marter Co. filed a bankruptcy petition and liquidated its noncash assets. Marter was paying forty cents on the dollar for unsecured claims. Keenan Co. held a mortgage of $150,000 on Marter's land which was sold for $110,000. The total amount of payment that Keenan should have received is calculated to be Select one: a.$150,000. b.$126,000. c.$44,000. d.$60,000. e.$110,000.

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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am. 110.
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:
How much is the estimated recovery percentage?
Margaret Lindley paid $15.100 of interest on her $301,000 acquisition debt for her home (fair market value of $501,000 $4,100 of interest on her $30100 home equity debt used to buy a new boat and cac $1,100 of credit card interest, and $3,100 of margin interest for the purchase of stock Assume that Margaret Lindley has $10,100 of interest income this year and no investiment expenses. How much of the interest expense may she deduct this year? Multiple Choice O O O $23,400 $22.300 $19,200 $1,200 None of the choices are correct
Use the trial balance presented for Lynch, Inc., in problem (51). Assume that the company will be liquidated and the following transactions will occur: • Accounts receivable of $18,000 are collected with remainder written off. • All of the company’s inventory is sold for $40,000. • Additional accounts payable of $10,000 incurred for various expenses such as utilities and maintenance are discovered. • The land and building are sold for $71,000. • The note payable due to the Colorado Savings and Loan is paid. • The equipment is sold at auction for only $11,000 with the proceeds applied to the note owed to the First National Bank. • The investments are sold for $21,000. • Administrative expenses total $20,000 as of July 23, 2017, but no payment has yet been made. a. Prepare a statement of realization and liquidation for the period from March 14, 2017, through July 23, 2017. b. How much cash would be paid to an unsecured, nonpriority creditor that Lynch, Inc., owes a total of $1,000?
Xavier Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $26,200 in free cash. The following debts, totaling $43,050, remain:Government claims to unpaid taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,000Salary during last month owed to Mr. Key (not an officer) . . . . . . . . . 19,200Administrative expenses . . . .. . . 3,450Salary during last month owed to Ms. Rankin (not an officer) . . . . . . 5,850Unsecured accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,550Indicate how much money will be paid to the creditor associated with each debt.
Charles Turner Construction Incorporated is a creditor of ABC Company. Turner constructed the office building in which ABC has its headquarters. At the time the building was constructed, Turner attached a lien on the building as security for the $80,000 note which Turner accepted. Now, ABC Company has filed for bankruptcy and it is estimated that the building has a net realizable value of $70,000. Turner’s status is: Fully Secured Partially Secured Unsecured A. Yes No Yes B. No No Yes C. No Yes No D. No Yes Yes E. Yes No No
Dave Company sold assets to Frank Company with an alleged value of $2,800,000. Frank Company paid $2,100,000 for the assets. The actual value of the assets was $1,800,000. Using the "benefit-of-the-bargain" damage loss rule, the fraud damages would be: A. $300,000. B. $1,000,000. C. $1,800,000. D. $2,800,000.
Mf6. 1. Debtor purchased a home in 2007 for $100,000. Acme Savings and Loan obtained a first mortgage in the property in exchange for an $80,000 loan. In 2010 Debtor's former business partner Smith obtained a judgment lien against Debtor for $40,000. In 2013 Debtor made home improvement by a $10,000 loan from First Financial in exchange for a second mortgage. Upon default, foreclosure proceedings forced a sale of Debtor's home in December 2022. At the time debtor owed Acme $70,000, Smith $30,000 and First Financial $8,000. The house was sold for $90,000. Selling expenses were $5,000. a. How much would each creditor receive from the proceeds of the sale? b. How much is the deficiency?
Before any debt cancellation, PeppersCo holds business land with a $2,400,000 fair market value, a $1,000,000 tax basis, and a related mortgage of $3,000,000. The lender reduces the mortgage principal by $600,000. What are the Federal income tax consequences of the debt cancellation given the following independent scenarios? A, Peppers is insolvent, and the land and related mortgage are the only asset and debt, respectively. B. the mortgage is seller financing, and Peppers is solvent. C. Peppers has filed for bankruptcy and the debt is discharged by that action.