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 (valued at $47,000) 89,000 (valued at $75,000) 219,000 (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? Amount to be received $ 238,500

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 (valued at $47,000) 89,000 (valued at $75,000) 219,000 (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? Amount to be received $ 238,500

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

Nissan Corporation is undergoing liquidation. On January 1, 2020 its Statement of Financial Position showed the following accounts: ASSETS Cash P 150,000 Accounts Receivables-net 290,600 Inventory 50,000 Prepaid Expenses 10,400 Building 380,000 Goodwill 80,000 TOTAL P 961.000 LIABILITIES AND EQUITY Salaries Payable P 85,000 Accounts Payable 120,700 Mortgages Payable 428,000 Loan Payable 130,000 Notes Payable 84,300 Ordinary Shares 170,000 Deficit (57,000) TOTAL P961.000 The mortgage payable is secured by the Building having a realizable value of P400,000. Accounts Payable amounting to P75,000 is secured by receivables amounting to P90,600 (P9,900 of which is uncollectible). The balance of receivables which has a realizable value of P187,500 is used to secure the loan payable. Inventory has a realizable value of P41,200. In addition to recorded liabilities are: accrued interest on mortgage payable amounting to P4,280,…
Shi Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $26,600 in free cash. The following debts, totaling $45,050, remain: Government claims to unpaid taxes Salary during last month owed to Mr. Key (not an officer) Administrative expenses Salary during last month owed to Ms. Rankin (not an officer) Unsecured accounts payable $ 7,400 19,225 3,850 Indicate how much money will be paid to the creditor associated with each debt. Types of Debts Administrative expenses Salary during last month owed to Mr. Key and Ms. Rankin 6,625 7,950 Answer is complete but not entirely correct. Amounts 3,850 $12.850 $ 3,716 $26,600 Government claims to unpaid taxes
After the end of the reporting period, prior to authorizing for issue the financial statementsof Chubby the Piggy Ltd for the year ended 31 March 20X7 the following issues were raised:1. The notification of the bankruptcy of a customer: The balance of trade receivablesdue from the customer at 31 March 20X7 was $23,000 and at the date of thenotification it was $25,000. No payment is expected from the bankruptcyproceedings.2. Sales of some items of product ChoCoCo were made at a price of $5,40 each in Apriland May 20X7. Sales staff receives a commission of 15% of the sales price on theseproducts. At 31 March 20X7 the company had 12,000 units of this product ininventory included at cost of $6 each.3. The company is being sued by an employee who lost a limb in an accident while atwork on March 15 20X7. The company is contesting the claim as the employee wasnot following the safety procedures that he had been instructed to follow.Accordingly the financial statements include a note of a…
The COCO Manufacturing Company has been forced into bankruptcy as of April 30, 2022. The statement of financial position on that date shows: ASSETS:Cash P 2,700Accounts Receivable 39,350Notes Receivable 18,500 Inventories 87,850Prepaid Expenses 950 Land and Buildings 61,250Equipment 48,800 Retained Earnings (30,850)Total ? LIABILITIES AND EQUITY: Accounts Payable P52,500 Notes Payable - PNB 15,000 Notes Payable - Suppliers 51,250 Accrued Wages 1,850 Accrued Taxes 4,650 Mortgage Bonds Payable 90,000 Common Stock - P 100 par 75,000 Total ? Additional Information:▪Accounts Receivable of P 16,110 and Noted Receivable of P 12,500 are expected to be…
Martinez Corp. experienced a fire on December 31, 2020, in which its financial records were partially destroyed. It has been able to salvage some of the records and has ascertained the following balances. December 31, 2020 December 31, 2019 Cash $ 38,100 $ 11,100 Accounts receivable (net) 74,000 128,400 Inventory 204,600 183,400 Accounts payable 50,200 90,600 Notes payable 36,500 64,900 Common stock, $100 par 406,600 406,600 Retained earnings 120,000 106,300 Additional information: 1. The inventory turnover is 3.7 times. 2. The return on common stockholders’ equity is 19%. The company had no additional paid-in capital. 3. The receivables turnover is 11.8 times. 4. The return on assets is 19%. 5. Total assets at December 31, 2019, were $607,100. Compute the following for Martinez Corp.. (Round all answers to 0 decimal places, e.g. 2,150.) (a) Cost of goods sold for 2020. $ (b) Net credit…
Shi Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $26,000 in free cash. The following debts, totaling $42,050, remain: Government claims to unpaid taxes Salary during last month owed to Mr. Key (not an officer) Administrative expenses Salary during last month owed to Ms. Rankin (not an officer) Unsecured accounts payable Required: Indicate how much money will be paid to the creditor associated with each debt. Types of Debts Administrative expenses Amounts $ 3,250 Salary during last month owed to Mr. Key and Ms. Rankin Government claims to unpaid taxes 0 $ 6,800 18,625 3,250 5,890 7,350
Please help me. Thankyou.
On April 15, 2018 Mike’s Framing Co., declared Chapter 11 bankruptcy, owing James Wholesalers $375.00. James will immediately write off Mike’s account as uncollectible. Prepare the appropriate journal entry for James.
How much is the estimated recovery percentage?
What are possible reasons for a company with $20 million worth of assets that files for chapter 7 bankruptcy and a secured creditor with claims of over $100 million and the building as a secuirty end up with nothing?
Shi Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $27,500 in free cash. The following debts, totaling $49,550, remain: Government claims to unpaid taxes $ 8,300 Salary during last month owed to Mr. Key (not an officer) 20,125 Administrative expenses 4,750 Salary during last month owed to Ms. Rankin (not an officer) 5,960 Unsecured accounts payable 8,850 Required: Indicate how much money will be paid to the creditor associated with each debt.
ASAP