Manji The Walston Company is to be liquidated. It has the following liabilities:Income taxesNotes payable (secured by land)Accounts payableSalaries payable (evenly divided between twoemployees)Bonds payableAdministrative expenses for liquidationThe company has the following assets:$ 3,200152,000101,00022,00086,00036,000Book ValueFair ValueCurrent assets$ 96,000Land116,000$ 51,000106,000Buildings and equipment116,000150,000Required:How much money will the holders of the notes payable collect following liquidation?Total amount collected

FREE ASSETS ACURRENT ASSETS $ 51,000.00BBUILDING & EQUIPMENT $ 150,000.00CTOTAL (A+B) $…

Answered: The Walston Company is to be…

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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Pitch Co. is undergoing liquidation. Infórmation on Pitch Co.. assets and liabilities is shown below: Вook value Realizable value ASSETS 1,000,000 500,000 1,300,000 Assets pledged to fully secured creditors Assets pledged to partially secured creditors 300,000 1,600,000 1,280,000 Free assets 3,100,000 2,880,000 LIABILITIES Unsecured liabilities with priority 400,000 480,000 1,000,000 1,050,000 Fully secured creditors Partially secured creditors Unsecured creditors without priority 650,000 650,000 1,400,000 3,580,000 1,400,000 3,450,000 1. What is the estimated recovery percentage of unsecured creditors without priority? а. 60% b. 75% с. 78% d. 80%
Pitch Co. is undergoing liquidation. Information on Pitch Co. assets and liabilities is shown below: Вook value Realizable value ASSETS 1,000,000 1,300,000 Assets pledged to fully secured creditors Assets pledged to partially secured creditors 500,000 300,000 1,280,000 1,600,000 3,100,000 Free assets 2,880,000 LIABILITIES 400,000 480,000 Unsecured liabilities with priority Fully secured creditors Partially secured creditors Unsecured creditors without priority 1,000,000 1,050,000 650,000 650,000 1,400,000 3,580,000 1,400,000 3,450,000 2. How much can the "partially secured creditors" expect to recover from their claims? а. 432,000 b. 445,600 c. 510,000 d. 548,000
A statement of realization and liquidation has been prepared for the RESTLESS Corporation. The following information is available:Assets to be realized- P60,000 Liabilities assumed- P50,000Assets acquired- P40,000 Liabilities not liquidated- P40,000Assets realized- P55,000 Liabilities to be Liquidated- P80,000Assets not realized- P15,000 Liabilities liquidated- P60,000Supplementary credits- P110,000 Supplementary Charges- P97,000How much is the net increase (decrease) in retained earnings?
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The statement of realization and liquidation of ABC Corp are as follows: Assets to be realized P1,800,000 Assets acquired 300,000 Assets realized 1,100,000 Assets not realized 1,200,000 Liabilities liquidated 1,600,000 Liabilities not liquidated P1,400,000 Liabilities assumed 1,500,000 Liabilities to be liquidated 2,000,000 Supplementary credits 1,950,000 Supplementary charges 2,500,000 Additional ordinary shares issued for cash during the year totaled P500,000. What is the ending balance of cash account assuming that Ordinary Share, beginning is P1,500,000 and deficit, ending is P400,000?
The following information is related to ABC Corporation, which is undergoing liquidation: Bonds payable amounting to P73,600 is secured by merchandise inventory with book value of P123,000 and net realizable value of 2/3 of the recorded amount. Of the P195,600 accounts payable, P55,000 is secured by equipment with a carrying amount of P76,800 which is 70% realizable. • Building with a carrying amount of P129,000 has a net realizable value of P99,000. Other unrecorded liabilities are accrued interest payable on bonds, P3,100; salaries payable, P17,400; taxes payable, P11,600; and trustee's fee, P8,500. • Cash available prior to liquidation amounts to P11,900. • Total assets of ABC Corp. presented in the statement of financial position prior to liquidation amounts to P480,000, including prepaid expenses and goodwill amounting to P7,600 and P22,000, respectively. Remaining assets other than those whose realizable values were mentioned above have a realizable value of 60% of the recorded…
When AAA Company filed for liquidation with the Securities and Exchange Commission, it prepared the following statement of financial position: Current Assets (net realizable value, P50,000) P 80,000 Land and Building (fair value, P240,000) 200,000 Goodwil (fair value, 0) 40,000 Total Assets P 320,000 Accounts Payable P 160,000 Mortgage Payable (secured by land & building) 200,000 Ordinary Share 100,000 Accumulated Profits (140,000) Total Liability and Equity P 320,000 What percentage of their claims are the unsecured creditors likely to get?
The following information was taken from the records of Blue Inc. for the year 2025: Income tax applicable to income from continuing operations $228,140, income tax applicable to loss on discontinued operations $31,110, and unrealized holding gain on available-for- sale debt securities (net of tax) $18,300. Gain on sale of equipment Loss on discontinued operations Administrative expenses Rent revenue Loss on write-down of inventory $115,900 91,500 292,800 48,800 73,200 Shares outstanding during 2025 were 100,000. Cash dividends declared Retained earnings January 1, 2025 Cost of goods sold Selling expenses Sales revenue BLUE INC. Income Statement $ $183,000 $ 3,000,000 1,037,000 Prepare a single-step income statement (with respect to items in Income from operations). (Round earnings per share to 2 decimal places, e.g. 1.48. Enter other revenue and gains before other expenses and losses) 366,000 2.318.000
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Big Corp. has been undergoing liquidation since December 1, 2020. As of July 31, 2021, the following data are available: P1,500,000 Liabilities not liquidated Liabilities to be liquidated P1,700,000 Assets acquired Assets realized P2,400,000 P2,250,000 Assets not realized P1,375,000 Liabilities assumed P2,625,000 Assets to be realized P2,750,000 Liabilities liquidated P1,750,000 Supplementary charges/debits P2,750,000 Supplementary credits P3,800,000 Answer the following questions: (answers can be repeated) Compute the ending cash balance of cash account (as of July 31, 2021) assuming that Choose... common stock and deficits are P2,750,000 and P750,000, respectively. What is the net gain/(loss) of Big Corp. from the liquidation? Choose...
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On January 1, 20x1, Magnum Corp. acquired all the identifiable assets and assumed the liabilities of Colt Corp. The book values and fair values of Magnum and Colt Corp. prior to business combination are as follows: Magnum Colt Book value Fair Value Book Value Fair Value Cash 6,000,000 6,000,000 1,000,000 1,000,000 Accounts Receivable 500,000 470,000 120,000 105,000 Allowance for doubtful account (40,000) (20,000) Inventories 1,000,000 950,000 500,000 510,000 Land 3,000,000 3,200,000 1,200,000 1,300,000 Building 2,000,000 1,600,000 1,000,000 850,000 Accumulated Depreciation (500,000) (200,000) Total 11,960,000 12,220,000 3,600,000 Accounts Payable 3,000,000 2,500,000 1,000,000 1,000,000 Notes Payable 500,000 480,000 600,000 550,000 Ordinary share - P100 par 4,000,000 1,000,000 Share premium 1,200,000 200,000…

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