PAYLESS Corporation filed a petition of bankruptcy on January 2011. On March 15, 2011 the trustee provided the following information about the corporation's financial affairs. Book values Estimated Realizable Values Assets P 200, 000 750, 000 P 200, 000 1, 000, 000 1, 500, 000 2. 500, 000 P 5,200, 000 Cash Accounts receivable, net Inventories Plant assets – net Total 750, 000 2, 800, 000 Liabilities P 500, 000 1, 500, 000 1, 000, 000 2. 200. 000 P 5. 200. 000 4. Determine the amount expected to be available for unsecured claims. Liability for priority claims Accounts payable – unsecured Note payable, secured by accounts receivable Mortgage payable, secured by all plant assets Total A. P1, 500, 000 B. P900, 000 С. Р800, 000 D. P1, 050, 000 5. Determine the expected recovery per peso of unsecured claims. A. PO.60 B. PO.5720 С. РО.70 D. PO.6350 6. The amount of recovery to unsecured accounts payable. A. P855, 000 C. P1, 290, 000 B. P900, 000 D. P600, 000

PAYLESS Corporation filed a petition of bankruptcy on January 2011. On March 15, 2011 the trustee provided the following information about the corporation's financial affairs. Book values Estimated Realizable Values Assets P 200, 000 750, 000 P 200, 000 1, 000, 000 1, 500, 000 2. 500, 000 P 5,200, 000 Cash Accounts receivable, net Inventories Plant assets – net Total 750, 000 2, 800, 000 Liabilities P 500, 000 1, 500, 000 1, 000, 000 2. 200. 000 P 5. 200. 000 4. Determine the amount expected to be available for unsecured claims. Liability for priority claims Accounts payable – unsecured Note payable, secured by accounts receivable Mortgage payable, secured by all plant assets Total A. P1, 500, 000 B. P900, 000 С. Р800, 000 D. P1, 050, 000 5. Determine the expected recovery per peso of unsecured claims. A. PO.60 B. PO.5720 С. РО.70 D. PO.6350 6. The amount of recovery to unsecured accounts payable. A. P855, 000 C. P1, 290, 000 B. P900, 000 D. P600, 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

dont give answer in imgae format
A company preparing for a Chapter 7 liquidation has the following liabilities: Note payable A of $100,000 secured by land having a book value of $55,000 and a fair value of $75,000. Note payable B of $130,000 secured by a building having a $65,000 book value and a $45,000 fair value. Note payable C of $65,000, unsecured. Administrative expenses payable of $25,000. Accounts payable of $125,000. Income taxes payable of $35,000. The company also has these other assets: Cash of $15,000. Inventory of $110,000 but with a net realizable value of $65,000. Equipment of $100,000 but with a net realizable value of $55,000. How much will each of the company's liabilities be paid at liquidation?
The Walston Company is to be liquidated. It has the following liabilities: Income taxes $ 9,400 Notes payable (secured by land) 134,000 Accounts payable 92,000 Salaries payable (evenly divided between two employees) 13,000 Bonds payable 77,000 Administrative expenses for liquidation 27,000 The company has the following assets: Book Value Fair Value Current assets $ 87,000 $ 42,000 Land 107,000 97,000 Buildings and equipment 107,000 131,000 How much money will the holders of the notes payable collect following liquidation?
Hilfmir Corporation filed for Chapter 11 bankruptcy on January 1, 2014. A summary of their financial status is shown below on June 30, 2014, at the date of the approved reorganization, along with the fair value of their assets. Per Books Fair ValueCash $ 134,000 $ 134,000A/R - net 20,000 20,000Inventory 32,000 40,000Plant Assets - net 114,000 106,000Patent 80,000 0 $ 380,000 A/P $ 60,000Wages Payable 20,000Prepetition liab. 250,000Common Stock 140,000Deficit…
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 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 Amounts Administrative expenses $ 4,750 Salary during last month owed to Mr. Key and Ms. Rankin Government claims to unpaid taxes $ 0 $ 8,300 20,125 4,750 5,960 8,850
Africa Company recently filed for bankruptcy. Immediately before liquidation. Africa Co. had the following statement of financial position Cash Investments at FVPL Accounts receivable Inventory Total P50,000 Accounts payable P650,000 150,000 Contributed capital 500,000 300,000 Retained eamings (150,000) 500,000 P1,000,000 Total P1,000,000 Africa had the following transactions in relation to its liquidation process • Sale of inventory amounted to P300,000. P50.000 was on account with the remainder on cash basis. The cost of merchandise sold amounted to P315,000. • Collections of receivables. P115.000. Purchase of additional inventory on account. P15,000. Paid suppliers, P350,000 Sold its investment at FVPL for P186500. including accrued interest of P1,500. Paid expenses of the trustee. P75.000. Unpaid expenses incurred amounted to P3500 Wrote-off P15.000 of its accounts receivables Required 1. How much is the net loss during the liquidation process?
please answer do not image.
Olds Company declares Chapter 7 bankruptcy. Following are the book values of the asset and liability accounts at that time. A bankruptcy expert estimates that administrative expense will total $15,000. 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 $ 27,000 63,000 73,000 203,000 403,000 123,000 (value unknown) 183,000 23,000 176,000 253,000 303,000 (valued at $31,000) (valued at $59,000) (valued at $163,000) (valued at $326,000) The holders of note payable B want to collect at least $101,200. Required: To achieve this goal, how much does the company have to receive in the liquidation of its equipment?
rr
Gonne Corporation is being liquidated under Chapter 7 of the Bankruptcy Act. The trustee has determined that the unsecured claims will receive $.35 on the dollar. Odemay Corporation holds a $100,000 mortgage note receivable from Gonne that is secured by equipment with a $120,000 book value and a $75,000 fair value. How much of the mortgage receivable will be recovered by Odemay?
Shi 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: $ 7,000 Government claims to unpaid taxes Salary during last month owed to Mr. Key (not an officer) Administrative expenses 19,200 3,450 Salary during last month owed to Ms. Rankin (not an officer) Unsecured accounts payable 5,850 7,550 Indicate how much money will be paid to the creditor associated with each debt. Types of Debts Amounts Administrative expenses Government claims to unpaid taxes Salary during last month owed to Mr. Key and Ms. Rankin
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 $