Mondesto Company has the following debts: Unsecured creditors $ 243,000 Liabilities with priority 123,000 Secured liabilities: Debt 1, $236,000; value of pledged asset 193,000 Debt 2, $198,000; value of pledged asset 113,000 Debt 3, $133,000; value of pledged asset 166,000 The company also has a number of other assets that are not pledged in any way. The creditors holding Debt 2 want to receive at least $170,800. For how much do these free assets have to be sold so that the creditors associated with Debt 2 receive exactly $170,800?

Mondesto Company has the following debts: Unsecured creditors $ 243,000 Liabilities with priority 123,000 Secured liabilities: Debt 1, $236,000; value of pledged asset 193,000 Debt 2, $198,000; value of pledged asset 113,000 Debt 3, $133,000; value of pledged asset 166,000 The company also has a number of other assets that are not pledged in any way. The creditors holding Debt 2 want to receive at least $170,800. For how much do these free assets have to be sold so that the creditors associated with Debt 2 receive exactly $170,800?

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter24: Bankruptcy, Reorganization, And Liquidation

Section: Chapter Questions

Problem 1P: Southwestern Wear Inc. has the following balance sheet: The trustees costs total 281,250, and the...

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Southwestern Wear Inc. has the following balance sheet: The trustees costs total 281,250, and the firm has no accrued taxes or wages. The debentures are subordinated only to the notes payable. If the firm goes bankrupt and liquidates, how much will each class of investors receive if a total of 2.5 million is received from sale of the assets?
Mondesto Company has the following debts: Unsecured creditors . . . . . . . $230,000Liabilities with priority . . . . . 110,000Secured liabilities:Debt 1, $210,000; value of pledged asset . . . . . . . . . . . . . . . . . . . . 180,000Debt 2, $170,000; value of pledged asset . . . . . . . . . . . . . . . . . . . . 100,000Debt 3, $120,000; value of pledged asset . . . . . . . . . . . . . . . . . . . . 140,000 The company also has a number of other assets that are not pledged in any way. The creditors holding Debt 2 want to receive at least $142,000. For how much do these free assets have to be sold so that the creditors associated with Debt 2 will receive exactly $142,000?
Veltri Incorporated has the following assets and liabilities (assets are stated at net realizable value): Assets pledged with secured creditors $ 80,000 Assets pledged with partially secured creditors 70,000 Other assets 180,000 Secured liabilities 40,000 Partially secured liabilities 95,000 Liabilities with priority 55,000 Unsecured liabilities 225,000 In a liquidation, how much money would be paid on the partially secured liabilities?
Veltri Incorporated has the following assets and liabilities (assets are stated at net realizable value): Assets pledged with secured creditors $ 80,000 Assets pledged with partially secured creditors 70,000 Other assets 180,000 Secured liabilities 40,000 Partially secured liabilities 95,000 Liabilities with priority 55,000 Unsecured liabilities 225,000 In a liquidation, what is the amount of free assets after payment of liabilities with priority?
Mondesto Company has the following debts: The company also has a number of other assets that are not pledged in any way. The creditors holding Debt 2 want to receive at least $142,000. For how much do these free assets have to be sold so that the creditors associated with Debt 2 will receive exactly $142,000?
47 ABC Corporation has become insolvent and a statement of affairs is being prepared. The following data are given. Market value of assets pledged with fully secured creditors 150,000 Fully secured creditors 50,000 Market value of assets pledged with partly secured creditors 90,000 Partly secured creditors 150,000 Creditors with priority 46,000 Unsecured creditors 80,000 Free assets 76,000 How much is the estimated amount available?
The statement of affairs of Darrell Putix Co. indicates that unsecured creditors without priority with total claims of ₱720,000 may expect to recover only ₱288,000 after all the assets were sold. Among the creditors of Darrell Putix Co. are the following: Government - taxes payable of ₱400,000, inclusive of ₱80,000 assessents and surcharges. XYZ bank - loan payable of ₱4,000,000 and accrued interest of ₱200,000, backed by collateral security with realizable value of ₱4,800,000. Alpha Financing Co. - loan payable of ₱3,200,000 backed by collateral security with realizable value of ₱2,000,000. Mr. Bombay - loan payable of ₱1,000,000 and accrued interest of ₱200,000. No collateral security. How much is the expected recovery of partially secured creditors? a. 1,280,000 b. 2,480,000 c. 2,160,000 d. 0
Please help me to understand this by writing your solution in good accounting form, thank you! PROBLEM: The following data were taken from the statement of affairs of ROBINSONS Corp.: Assets pledged for fully secured liabilities (current fairvalue, $75,000) $90,000 Assets pledged for partially secured liabilities (currentfair value $52,000) $74,000 Free assets (current fair value, $40,000) $70,000 Unsecured liabilities with priority $7,000 Fully secured liabilities $30,000 Partially secured liabilities $60,000 Unsecured liabilities without priority $112,000 *The amount that will be paid to creditors with priority is:a. 7,000 b. 6,000 c. 7,500 d. 6,200 *The amount to be paid fully secured creditors is:a. 30,000 b. 32,000 c. 20,000 d. 35,000 *The amount to be paid to partially secured creditors is:a. 52,700 b. 57,200 c. 56,200 d. 57,000 *The amount to be paid to unsecured creditors:a. 78,200 b. 70,800 c. 72,000 d. 72,800
Can you please help me understand how to solve problems like this one by giving a detailed solution? Would appreciate your help so much. Thank you! PROBLEM: The following data were taken from the statement of affairs of ROBINSONS Corp.: Assets pledged for fully secured liabilities (current fairvalue, $75,000) $90,000 Assets pledged for partially secured liabilities (currentfair value $52,000) $74,000 Free assets (current fair value, $40,000) $70,000 Unsecured liabilities with priority $7,000 Fully secured liabilities $30,000 Partially secured liabilities $60,000 Unsecured liabilities without priority $112,000 *The amount that will be paid to creditors with priority is:a. 7,000 b. 6,000 c. 7,500 d. 6,200*The amount to be paid fully secured creditors is:a. 30,000 b. 32,000 c. 20,000 d. 35,000*The amount to be paid to partially secured creditors is:a. 52,700 b. 57,200 c. 56,200 d. 57,000*The amount to be paid to unsecured creditors:a. 78,200 b. 70,800 c. 72,000 d.…
A statement of affairs shows $30,000 of assets pledged to partially secured creditors, liabilities of $65,000 to partially secured creditors, liabilities of $25,000 to unsecured creditors with priority, and liabilities of $90,000 to other unsecured creditors.What are total unsecured liabilities, as reported on the statement of affairs? Select one: a. $155,000 b. $100,000 c. $ 90,000 d. $125,000
A Company that was to be liquidated had the following liabilities: Income Taxes 10,000 Notes Payable secured by land 100,000 Accounts Payable 251,050 Salaries Payable 12,950 Administrative expenses or liquidation 20,000 The Company had the following assets: Book Value Fair Value Current assets 100,000 95,000 Land 50,000 75,000 Building 150,000 200,000 QUESTION: Determine the total payment to unsecured creditors.
BSO, Inc., has assets of $600,000 and liabilities of $450,000, resulting in a debt-to-assets ratioof 0.75. For each of the following transactions, determine whether the debt-to-assets ratio willincrease, decrease, or remain the same. Each item is independent.a. Purchased $20,000 of new inventory on credit.b. Paid accounts payable in the amount of $50,000.c. Recorded accrued salaries in the amount of $100,000.d. Borrowed $250,000 from a local bank, to be repaid in 90 days.

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Unsecured creditors	$	243,000
Liabilities with priority		123,000
Secured liabilities:
Debt 1, $236,000; value of pledged asset		193,000
Debt 2, $198,000; value of pledged asset		113,000
Debt 3, $133,000; value of pledged asset		166,000