Chapter 25, Problem 1MC

(1)

Summary Introduction

Case summary: A medium sized manufacturing firm, KC Inc. has sold their clothes to their more than ten year old purchaser who runs a departmental store in the name of RB departmental store. The goods were sold two weeks ago on credit. The President of KC Inc. heard news about RB departmental store that its management is suffering from financial loss.

Due to this RB departmental store’s management is planning for reorganization or liquidation with federal bankruptcy court. The president is worried about the receivables and also wants to know more about proceedings for bankruptcy, reorganization and liquidation for which the person asked their Chief financial officer to brief about.

To determine: Major causes of business failure.

(2)

Summary Introduction

To determine: If business failures take place evenly on time.

(3)

Summary Introduction

To determine: The firm based on its size which is more prone to business failure.