ABC Corporation is experiencing difficulty in paying its bills and is considering filing for bankruptcy.Current data show:AssetsCashAccounts ReceivableInventory - MaterialsInventory - Finished GoodsPrepaid ExpensesLandBuildingTrucksEquipmentIntangiblesTotal AssetsSAPIESShareholders' EquityTotal Liabilities and EquityCompute for the Net Free AssetsOLINESBookValue4,00040,00036,00050,0001,00010,00070,00020,00045,00016,000P292,000UNIVERSI110,000(38,000)P292,000Est.RealizableValue0LiabilitiesSecured by:P 77,000911Accounts PayableBank LoanReminder from the $25,000andbook: Code of 70% of receivablesWages Payable Cheating during exam12,000, quizzes or plagiarism in connectionTaxes Payable with any academic wo 8,000ting of the same: 1st violation-Truck Loanwarning with invalidat5,000rade; Truck with P12,000 BV & P2,500 ERVMortgage Payablespension with inva43,000f grade; 3rd violatiLand and BuildingLoan Payable to dismissal/ non-re-50,000 with invalidation of Finished GoodsShareholder LoanNot subordinated to other debt131P 4,00020,000042,00060,000LEDIFICE

The net free assets are the amount of realized value of an asset after secured creditor and…

Answered: ABC Corporation is experiencing…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter24: Bankruptcy, Reorganization, And Liquidation

Section: Chapter Questions

Problem 4P

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Alitech Corporation is liquidating under Chapter 7 of the Bankruptcy Act. The accounts of Alitech at the time of filing are summarized as follows: Estimated Realizable Book Value ValueCash $ 10,000 $ 10,000Accounts receivable-net 60,000 50,000Inventory 110,000 65,000Land 20,000 35,000Building 200,000 126,000Goodwill…
Alitech Corporation is liquidating under Chapter 7 of the Bankruptcy Act. The accounts of Alitech at the time of filing are summarized as follows: Estimated Realizable Book Value ValueCash $ 10,000 $ 10,000Accounts receivable-net 60,000 50,000Inventory 110,000 65,000Land 20,000 35,000Building 200,000 126,000Goodwill…
Ataway Company has suffered severe financial difficulties and is considering filing a bankruptcy petition. It has the following assets and liabilities. The assets are stated at net realizable value. Assets (pledged against debts of $74,000) $ 124,000 Assets (pledged against debts of $138,000) 54,000 Other assets 84,000 Liabilities with priority 76,400 Other unsecured creditors 204,000 In a liquidation, how much money would be paid on the partially secured debt?
Ataway Company has severe financial difficulties and is considering filing a bankruptcy petition. At this time, it has the following assets and liabilities. The assets are stated at net realizable value. Assets (pledged against debts of $70,000) . . . . . . . . . . . . . . . . $116,000Assets (pledged against debts of $130,000) . . . . . . . . . . . . . . . . . 50,000Other assets . . . . . . . . . . . . . . . 80,000Liabilities with priority . . . . . . . 42,000Other unsecured creditors . . . 200,000 In a liquidation, how much money would be paid on the partially secured debt?
Telstar Co. had severe financial difficulties and was considering the possibility of filing a bankruptcy petition. At that time, the company had the following assets (stated at net realizable value) and liabilities. Assets (pledged against debts of $91,000) 150,800 Assets (pledged against debts of $169,000) 65,000 Other assets 104,000 Liabilities with priority 54,600 Unsecured creditors 60,000 A. Prepare a schedule to show the amount of total assets available to pay liabilities with priority and unsecured creditors B. Prepare a schedule to show the amount of assets that are available for unsecured creditors after payment of liabilities with priority C. Prepare a schedule to show the amount of total unsecured liabilities D. Prepare a schedule…
ABC Company is in a capital deficiency position and is considering the possibility of liquidation. An analysis of the assets and liabilities of the entity is provided: Assets at net realizable value (pledged against liabilities of P150,000) 250,000 Assets at net realizable value (pledged against liabilities of P260,000) 100,000 Assets at net realizable value (not pledged against any liabilities) 160,000 Liabilities with priority 85,000 Unsecured creditors 400,000 Round off the estimated recovery percentage to XX.XX%, if needed. How much is the estimated payment to partially secured creditors?
The following information was gathered from the books of Gorgeous Company which is currently undergoing bankruptcy proceedings.· Note payable of P97,500 is secured by furniture and equipment with a carrying amount of P120,000 that is estimated to be 75% realizable.· A mortgage payable of P192,500 is secured by building valued at P35,000 less than carrying amount of P230,000· Assets not mentioned above have an estimated value of P62,500, an amount that is P15,000 above carrying amount.· Total liabilities not mentioned above total P96,000, including claims with priority of P18,500 How much is the amount available to Unsecured Creditors?
SG Company is bankrupt and has undergone corporate liquidation. Presented below is its statement of financial position before the start of liquidation (see attached photo):· Liquidation expenses amounting to P600,000 were paid.· The loan payable is secured by the Machinery with fair value of P300,000.· The mortgage payable is secured by the building.· At the end of liquidation, the holder of loan payable received P340,000.Using the information of SG Company, what is the fair value of the building?
Kent Co. filed a voluntary bankruptcy petition on August 15, 2008, and the statement of affairs reflects the following amounts: Assets Book value Estimated Market value Pledged with fully secured creditors P300,000 P370,000 Pledged with partially secured creditors 180,000 120,000 Free Assets 420,000 320,000 Liabilities With priority 70,000 Fully secured 260,000 Partially secured 200,000 Unsecured 540,000 What amount of cash will be available for unsecured creditors?
Casper Blueprinting, Inc., has filed under Chapter 7 of the Bankruptcy Code. The estimated net realizable value of its assets is as follows:Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 23,000Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,000Inventory and supplies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000Blueprinting equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114,000Furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000Computer hardware and software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,000Deliver vehicle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,000Total. . . . . . . . . . . . . . . . .…
Lucio Incorporated is undergoing liquidation. The statement of affairs shows unsecured claims without priority of 5,900,000; partially secured liabilities of 3,900,000; unsecured claims with priority of 365,000, and net free assets of 3,719,000. If unsecured claims wiyhout priority received 55% of their claims, how much will the partially secured liabilities receive?
Latex Incorporated is undergoing liquidation. The statement of affairs shows unsecured claims without priority of 3,900,000; partially secured liabilities of 2,800,000; unsecured claims with priority of 264,000 and net free assets of 2,519,000. If unsecured claims without priority received 55% of their claims, how much will the partially secured liabilities receive?

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