Olds Company declares Chapter 7 bankruptcy. The following are the asset and liability book values at that time. Administrative expenses are estimated to be $30,000: 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 $ 42,000 78,000 (worth $46,000) 88,000 (worth $74,000) (worth 218,000 $178,000) (worth 418,000 $356,000) 138,000 (worth unknown) 198,000 Amount to be received 38,000 206,000 268,000 318,000 The holders of note payable B want to collect at least $120,600. To achieve this goal, how much does the company have to receive in the liquidation of its equipment?
Olds Company declares Chapter 7 bankruptcy. The following are the asset and liability book values at that time. Administrative expenses are estimated to be $30,000: 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 $ 42,000 78,000 (worth $46,000) 88,000 (worth $74,000) (worth 218,000 $178,000) (worth 418,000 $356,000) 138,000 (worth unknown) 198,000 Amount to be received 38,000 206,000 268,000 318,000 The holders of note payable B want to collect at least $120,600. To achieve this goal, how much does the company have to receive in the liquidation of its equipment?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Olds Company declares Chapter 7 bankruptcy. The following are the asset and liability book values at that
time. Administrative expenses are estimated to be $30,000:
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
$ 42,000
78,000 (worth $46,000)
88,000 (worth $74,000)
(worth
218,000
Amount to be received
$178,000)
(worth
418,000
$356,000)
138,000 (worth unknown)
198,000
38,000
206,000
268,000
318,000
The holders of note payable B want to collect at least $120,600.
To achieve this goal, how much does the company have to receive in the liquidation of its equipment?
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