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 $20,000. 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 32,000 68,000 (valued at $36,000) (valued at $64,000) 208,000 (valued at $168,000) 78,000 408,000 (valued at $336,000) 128,000 (value unknown) 188,000 28,000 186,000 258,000 308,000 The holders of note payable B want to collect at least $129,000. To achieve this goal, how much does the company have to receive in the liquidation of its equipment? Answer is complete but not entirely correct. Amount to be received $ 82,000
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 $20,000. 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 32,000 68,000 (valued at $36,000) (valued at $64,000) 208,000 (valued at $168,000) 78,000 408,000 (valued at $336,000) 128,000 (value unknown) 188,000 28,000 186,000 258,000 308,000 The holders of note payable B want to collect at least $129,000. To achieve this goal, how much does the company have to receive in the liquidation of its equipment? Answer is complete but not entirely correct. Amount to be received $ 82,000
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 book values of the asset and
liability accounts at that time. A bankruptcy expert estimates that administrative expense will total
$20,000.
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
32,000
68,000
(valued at $36,000)
78,000 (valued at $64,000)
208,000 (valued at $168,000)
408,000 (valued at $336,000)
128,000 (value unknown)
188,000
28,000
186,000
258,000
308,000
The holders of note payable B want to collect at least $129,000.
To achieve this goal, how much does the company have to receive in the liquidation of its
equipment?
Answer is complete but not entirely correct.
Amount to be received
$ 82,000 X
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