Interest on Notes Payable 2,400 Bonds Payable (secured by land and building) 60,000 Interest on bonds Payable 2,800 Total 145,200 1. What is the estimated amount that will be available for general unsecured creditors upon liquidation (net free assets) ? 2. What is the total amount of unsecured claims? 3. Determine the estimated dividend percentage (in decimal form rounded in two decimal places)
A Company recently petitioned for bankruptcy and is now in the process of preparing a statement of affairs.
The carrying values and estimated fair values of the assets of the Company are as follows:
|
|
Carrying Value |
Fair Value |
|
Cash |
P 8,000 |
P 8,000 |
|
|
18,000 |
12,000 |
|
Inventory |
24,000 |
14,000 |
|
Land |
30,000 |
28,000 |
|
Building (net) |
72,000 |
40,000 |
|
Equipment (net) |
68,000 |
32,000 |
|
Total |
220,000 |
134,000 |
Debts of the Company are as follows:
|
Accounts payable |
P 24,000 |
|
Wages Payable (all have priority) |
4,000 |
|
Taxes payable |
4,000 |
|
Notes payable (secured by receivable and inventory) |
48,000 |
|
Interest on Notes Payable |
2,400 |
|
Bonds Payable (secured by land and building) |
60,000 |
|
Interest on bonds Payable |
2,800 |
|
Total |
145,200 |
1. What is the estimated amount that will be available for general unsecured creditors upon liquidation (net free assets) ?
2. What is the total amount of unsecured claims?
3. Determine the estimated dividend percentage (in decimal form rounded in two decimal places).
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