Solve it without fail Ataway Company has severe financial difficulties and is considering filing a bankruptcy petition. At this time, it has thefollowing assets and liabilities. The assets are stated at net realizable value.Assets (pledged against debts of $76,000) $128,000Assets (pledged against debts of $142,000) 56,000Other assetsLiabilities with priorityOther unsecured creditors86,00065,000206,000In a liquidation, how much money would be paid on the partially secured debt?

Step 1: Net Assets and Total unsecured creditors *Free assetsLiabilitiesFully secured debts$128,000…

Answered: Ataway Company has severe financial…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter23: Corporate Restructuring

Section: Chapter Questions

Problem 6P

See similar textbooks

Similar questions

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?
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…
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?
The Sunshine Company has the following data in connection with its bankruptcy petition with the Securities and Exchange Commission at the end of 2018. Unsecured creditorsP287.500. Liabilities with priority137,500 Secured Liabilities Debt 1, P262,500; value of pledged asset 225,000 Debt 2, P212,500, value of pledged asset 125,000 Debt 3, P150,000, value of pledged asset 175,000' The company also has a number of other assets that are not pledge in any way, The creditors holding Debt 2 want to receive at least P177,50 Required: For how much do these free assets have to be sold so that Debt 2 would receive exactly P177,500. Show your solution
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?
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…
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?
Xavier 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: Indicate how much money will be paid to the creditor associated with each debt.
Jaez Corporation is in the process of going through a reorganization. As of December 31, 2024, the company’s accountant has determined the following information although the company is still several months away from emerging from the bankruptcy proceeding. Net Book Value Fair Value Assets Cash $ 31,000 $ 31,000 Inventory 53,000 55,000 Land 164,000 218,000 Buildings 228,000 268,000 Equipment 162,000 165,000 Allowed Claims Expected Settlement Liabilities as of the date of the order for relief Accounts payable $ 131,000 $ 28,000 Accrued expenses 38,000 12,000 Income taxes payable 30,000 26,000 Note payable (due 2027, secured by land) 108,000 108,000 Note payable (due 2029) 178,000 88,000 Liabilities since the date of the order for relief Accounts payable $ 68,000 Note payable (due 2026) 118,000 Stockholders' equity Common stock $ 208,000 Deficit (241,000) Required: Prepare the balance sheet for Jaez…
Deere, Inc. will be liquidated under Chapter 7 of the Bankruptcy Act. Its current balance sheet is shown below. Fixed assets will be sold for $4,000,000 and current assets will be sold for $3,000,000. All fixed assets are pledged as collateral for all mortgage bonds. Subordinated debentures are subordinate only to notes payable. Trustee costs are $750,000. Before Before Default Balance Sheet Default Current Assets 5,000,000 Accounts payable 1,000,000 Net fixed assets 7,000,000 Accrued taxes 50,000 Accrued wages 85,000 Notes payable 2,000,000 Total current liabilities 3,135,000 First-mortgage bonds 2,000,000 Second-mortgage bonds 3,000,000 Subordinated debentures 5,000,000 Common stock 300,000 Retained earnings (1,435,000) Total assets 12,000,000 Total claims 12,000,000 a. How much will SHs receive? b. How much will mortgage bondholders receive? c. How much will…
Bottomless Pit Inc. files a voluntary petition for bankruptcy on May 1, 200X which includes the following assets and liabilities: Carrying Realizable Amount Amount Assets Cash $2,000 $2,000 Accounts receivable 66,000 20,000 Inventory 6,000 3,000 Building 80,000 130,000 Equipment 36,000 10,000 Total Assets $190,000 $165,000 Liabilities Salaries payable $5,000 Taxes payable 10,000 Accounts payable 80,000 Loan payable 115,000 secured by building Liquidation costs payable 5,000 $215,000 Prepare a Statement of Affairs and a Schedule of Estimated Amounts to be Recovered by Creditors as of May 1, 200X. On May 1, 200X the Bankruptcy Court appointed you as trustee to administer the assets…

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

SEE MORE TEXTBOOKS