Numbers 6, 7 and 8AB Corp. is experiencing financial difficulty and about to liquidate. The following data were available:Book value of assets:Cash150,000200,000800,000InventoriesLandStockholders' equity:Ordinary sharesRetained earnings (deficit)500,000(325,000)Book value of the liabilities of AB Corp. consists of accounts payable, salaries payable, loan payable,and mortgage payable. The loan payable in the amount of P300,0001f1is secured by the inventories. Themortgage payable in the amount of P450,000 is secured by the land with an estimated market value ofP400,000. Total liabilities with priority was P200,000 (including P50,000 estimated liquidation expensesand salaries to employees). The holder of the mortgage payable received P440 000 at the end ofliquidation.6. What is the estimated deficiency?

In liquidation as per rule first we pay secured creditors. First…

Answered: p. is experlencing financial difficulty…

Business

Accounting

p. is experlencing financial difficulty and about to liquidate. The following data were available:

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?
Assume that as of January 1, 20Y8, Sylvester Con- suiting has total assets of $500,000 and total assets of $150,000. As of December 31, 20Y8, Sylvester has total liabilities of $200,000 and total stockholders’ equity of $400,000. (a) What was Sylvester’s stockholders’ equity as of January 1, 20Y8? (b) Assume that Sylvester did not pay any dividends during 20Y8. What was the amount of net income for 20Y8?
Chasse Building Supply Inc. reported net cash provided by operating activities of $243,000, capital expenditures of $112,900, cash dividends of $35,800, and average maturities of long-term debt over the next 5 years of $122,300. What is Chasses free cash flow and cash flow adequacy ratio? a. $94,300 and 0.77, respectively c. $130,100 and 1.06, respectively b. $94,300 and 0.82, respectively d. $165,900 and 1.36, respectively
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The records containing several transactions incurred by Forbes Corporation at December 31, 2021 showed the following balances: Bad debts expense 2,750,000Freight out 4,000,000Cost of sales 46,350,000Loss on sale of equipment 2,000,000Loss on early retirement of long-term debt 3,000,000Sales 97,500,000Interest income 4,850,000Administrative expenses 11,250,000Finished goods inventory, January 1 60,000,000Sales commissions 6,000,000Finished goods inventory, December 31 55,000,000Income tax rate 30% What amount shall Forbes Corporation shall report as its net income for the year 2021?
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The financial condition of two companies is expressed in the following accounting equation: Assets = Liabilities + Common Stock + Retained Earnings Allen $ 12,000 = $ 8,760 + $ 2,760 + $ 480 White $ 18,150 = $ 4,200 + $ 9,750 + $ 4,200 Requiredc. Assume Allen incurs a $6,100 operating loss. The remaining assets are sold for the value shown on the books, and the cash proceeds are distributed to the creditors and investors. How much money will be paid to creditors and how much will be paid to investors?d. Assume White incurs a $6,100 operating loss. The remaining assets are sold for the value shown on the books, and the cash proceeds are distributed to the creditors and investors. How much money will be paid to creditors and how much will be paid to investors?
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