Shi Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $27,500 in freecash. The following debts, totaling $49,550, remain:Government claims to unpaid taxesSalary during last month owed to Mr. Key (not an officer)Administrative expensesSalary during last month owed to Ms. Rankin (not an officer)Unsecured accounts payableRequired:Indicate how much money will be paid to the creditor associated with each debt.Types of DebtsAmountsAdministrative expenses$4,750Salary during last month owed to Mr. Key and Ms. RankinGovernment claims to unpaid taxes$0$ 8,30020,1254,7505,9608,850

The objective of the question is to determine how much money will be paid to each creditor in the…

Answered: Shi Company is going through a Chapter…

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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Miner Company is being forced into bankruptcy. The Company's creditors and stockholders have requested an estimate of the results of liquidation of the Company. Miner's trial balance follows: Accounts Debit Credit Cash P6,000 Accounts receivable 63,000 Allowance for bad debts P2,000 Notes receivable 50,000 Accrued interest on notes receivable 1,200 Inventory Buildings Accumulated depreciation-Buildings Equipment Accumulated depreciation-Equipment Prepaid insurance 60,000 182,000 63,000 14,600 1,400 1,100 Goodwill 8,500 Accrued wages Taxes payable Accounts payable and other liabilities Notes payable Accrued interest payable Common stock 6,000 2,400 170,000 80,000 1,600 110,000 50,000 Retained earnings (deficit) Total P436,400 P436 400 The assets are expected to bring cash on conversion in the following amounts Accounts receivable P50,000 Notes receivable including P1,000 accrued interest 40,800 Building 75,000 Prepaid insurance 400
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,…
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…
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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.
APA, Inc. has forced into bankruptcy and has begun to liquidate. Unsecured claims will be paid at the rate of 40 cents on the peso. ABC Co. holds a non-interest bearing note receivable from APA in the amount of P100,000, collateralized by machinery with a liquidation value of P25,000. The total amount to be realized by ABC on this note receivable is:
The following transactions were completed by Emmanuel Company during the current fiscal year ended December 31: Jan. 29 Received 40% of the $17,000 balance owed by Jankovich Co., a bankrupt business, and wrote off the remainder as uncollectible. Apr. 18 Reinstated the account of Vince Karm, which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,560 cash in full payment of Karm’s account. Aug. 9 Wrote off the $22,380 balance owed by Golden Stallion Co., which has no assets. Nov. 7 Reinstated the account of Wiley Co., which had been written off in the preceding year as uncollectible. Journalized the receipt of $13,220 cash in full payment of the account. Dec. 31 Wrote off the following accounts as uncollectible (one entry): Claire Moon Inc., $22,860; Jet Set Co., $15,320; Randall Distributors, $41,460; Harmonic Audio, $18,890. 31 Based on an analysis of the $2,740,000 of accounts receivable, it was estimated that $113,330 will…
Howard Manufacturing has two debts outstanding with a creditor. Howard is experiencing financial difficulties, and the creditor has granted a concession. Therefore, accounting for the debt in question qualifies as a troubled debt restructuring. At the date of the restructuring, July 1 of the current year, the two debts and the proposed restructuring are as follows:Debt A—This debt has a carrying value of $1,200,000 plus accrued interest of $24,000 at the restructuring date. The terms of restructuring call for Howard to transfer to the creditor a vacant parcel of land with a fair market value of $600,000 and a book value of $425,000. In addition, Howard will pay $70,000 to the creditor at the end of each of the next eight calendar quarters. Debt B—This 6% debt has a carrying value of $2,100,000 and accrued interest of $52,500.The terms of the restructuring call for Howard to issue nonvoting common stock with a fair value of $500,000 to the creditor. In addition, $193,553.02 will be paid…

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