Liquidation based Valuation WWW Inc. Recently has had financial difficulty and is being liquidated. The firm has a the liquidation value of P2,000,000 – P800,000 from the fixed assets that served as collateral for the mortgage bonds and P1,200,000 from all other assets ( all prior claims have been satisfied) The The firm current capital structure is as follows: Unsecured bonds - P1,000,000 Mortgaged bonds - P800,000 Preference shares - P200,000 Ordinary shares - P500,000 How much will the ordinary shareholders from the Liquidation?

Liquidation based Valuation WWW Inc. Recently has had financial difficulty and is being liquidated. The firm has a the liquidation value of P2,000,000 – P800,000 from the fixed assets that served as collateral for the mortgage bonds and P1,200,000 from all other assets ( all prior claims have been satisfied) The The firm current capital structure is as follows: Unsecured bonds - P1,000,000 Mortgaged bonds - P800,000 Preference shares - P200,000 Ordinary shares - P500,000 How much will the ordinary shareholders from the Liquidation?

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 1BCRQ

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WW Inc. Recently has had financial difficulty and is being liquidated. The firm has a liquidation value of Php 2,000,000 - Php800,000 from the fixed assets that served as collateral for the mortgage bonds and Php 1,200,000 from all other assets (all prior claims have been satisfied). The firm's current capital structure is as follows: Unsecured bonds - Php1,000,000Mortgage bonds - Php800,000Preference shares - Php200,000Ordinary shares - Php500,000 How much will the ordinary shareholders from the liquidation?
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?
Quest Company is threatened with bankruptcy due to its inability to meet interest payments and fund requirements to retire P6,000,000 note payable with accrued interest payable of P600,000. The entity has entered into an agreement with the creditor to exchange equity instruments for the liability.The terms of the exchange are 300,000 ordinary shares wit P5 par value and P10 market value, and 25,000 preference shares with P10 par value and P60 market value. 1. What is the gain on the extinguishment of the note payable? 2. What is the total share premium from the issuance of the preference and ordinary shares?
Hurrah, Inc. recently has had financial difficulty and is being liquidated by the Federal Bankruptcy Court. The firm has a liquidation value of $1,000,000 from the fixed assets that served as collateral for the mortgage bonds (all prior claims have been satisfied). The firm's current capital structure is shown below. How much will the common stockholders receive in the liquidation? Source of Capital Amount Unsecured bonds $500,000 Mortgage bonds 400,000 Preferred stock 100,000 Common stock 500,000
A corporation has an estimated liquidation value (after all prior claims have been satisfied) of$3,000,000, $1,500,000 from fixed assets, and $1,500,000 from current assets. The firm's value as agoing concern is $4,000,000. The firm's current capital structure is as follows: Debentures - $5,000,000Mortgage Bonds - 2,000,000Preferred Stock - 1,000,000Common Stock - 4,000,000Total = $12,000,000*Secured by fixed assets.Prepare a table indicating the amount, if any, to be distributed to each claimant, in the event ofliquidation.
Beresford Incorporated purchased several investments in debt securities during 2023, its first year of operations. The following information pertains to these securities. The fluctuations in their fair values are not considered permanent. Held-to-Maturity Securities: Fair Value 12/31/2023 Fair Value 12/31/2024 Amortized Cost 12/31/2023 Amortized Cost 12/31/2024 ABC Company Bonds $ 375,000 $ 400,000 $ 367,500 $ 360,000 Trading Securities: Fair Value 12/31/2023 Fair Value 12/31/2024 Cost DEF Company Bonds $ 48,000 $ 59,500 $ 66,000 GEH Incorporated Bonds $ 47,000 $ 77,000 $ 39,000 IJK Incorporated Bonds $ 44,000 $ 38,500 $ 32,900 Available-for-Sale Securities: Fair Value 12/31/2023 Fair Value 12/31/2024 Cost LMN Company Bonds $ 130,500 $ 150,400 $ 140,000 What total unrealized holding gain would Beresford report in its 2024 income statement relative to its investments in bonds?
Beresford Inc. purchased several investments in debt securities during 2020, its first year of operations. The following information pertains to these securities. The fluctuations in their fair values are not considered permanent. Held-to-Maturity Securities: Fair Value 12/31/2020 Fair Value 12/31/2021 Amortized Cost 12/31/2020 Amortized Cost 12/31/2021 ABC Co. Bonds $ 375,000 $ 400,000 $ 367,500 $ 360,000 Trading Securities: Fair Value 12/31/2020 Fair Value 12/31/2021 Cost DEF Co. Bonds $ 48,000 $ 59,500 $ 66,000 GEH Inc. Bonds $ 47,000 $ 77,000 $ 39,000 IJK Inc. Bonds $ 44,000 $ 38,500 $ 32,900 Available-for-Sale Securities: Fair Value 12/31/2020 Fair Value 12/31/2021 Cost LMN Co. Bonds $ 130,500 $ 150,400 $ 140,000 What would be the balance in Beresford's accumulated other comprehensive income with respect to these investments in its 12/31/2021 balance sheet (ignore taxes)?
Allocating Liquidation Between Common Stockholders and Preferred Stockholders The Arcadia Company is liquidating. After paying off all of its creditors, the company has $1,000,000to distribute between its preferred stockholders and its common stockholders. The aggregate parvalue of the preferred stock is $900,000 and the aggregate par value of its common stock is $2,000,000.How much of the remaining $1,000,000 in assets should be distributed to the preferredstockholders and how much should be distributed to the common stockholders? Dollars to be distributed Preferred stockholders Common stockholders
For which of the corporate distributions listed below may loss be recognized? Question options: A dividend of property with a basis of $500,000 and a value of $450,000 Securities with a value of $500,000 and a basis of $550,000 distributed to its shareholders pro-rata as part of a complete liquidation; the securities were bought by the corporation three years ago with internal funds. Land with a value of $400,000 and a basis of $470,000 distributed to a 70% shareholder pursuant to a complete liquidation; the land was contributed by the same shareholder 20 months before the liquidation
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 shareholders’ equity, beg. assuming that the cash balance, ending amounted to P50,000? CHOICES: P92,000 P55,000 P118,000 P12,000
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 shareholders’ equity, beg. assuming that the cash balance, ending amounted to P50,000? a. P118,000 b. P12,000 c. P92,000 d. P55,000
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 shareholders’ equity, beg. assuming that the cash balance, ending amounted to P50,000?