Prior to filing a voluntary Chapter 7 bankruptcy petition, Haynes Company pays a supplier $13,000 to satisfy an unsecured claim. Haynes was insolvent at the time. Subsequently, the trustee appointed to oversee this liquidation forces the return of the $13,000 by the supplier. Which of the following is true?a. A preference transfer has been voided.b. All transactions just prior to a voluntary bankruptcy proceeding must be nullified.c. The supplier should sue for the return of this money.d. The $13,000 claim becomes a liability with priority.
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Prior to filing a voluntary Chapter 7 bankruptcy petition, Haynes Company pays a supplier $13,000 to satisfy an unsecured claim. Haynes was insolvent at the time. Subsequently, the trustee appointed to oversee this liquidation forces the return of the $13,000 by the supplier. Which of the following is true?
a. A preference transfer has been voided.
b. All transactions just prior to a voluntary bankruptcy proceeding must be nullified.
c. The supplier should sue for the return of this money.
d. The $13,000 claim becomes a liability with priority.
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- Choose the correct. Prior to filing a voluntary Chapter 7 bankruptcy petition, Haynes Company pays a supplier $13,000 to satisfy an unsecured claim. Haynes wasinsolvent at the time. Subsequently, the trustee appointed to oversee this liquidation forces the return of the $13,000 by the supplier. Which of the following is true?a. A preference transfer has been voided.b. All transactions just prior to a voluntary bankruptcy proceeding must be nullified.c. The supplier should sue for the return of this money.d. The $13,000 claim becomes a liability with priority.Which of the following is the minimum limitation necessary for filing an involuntary bankruptcy petition in connection with a company that has 57 unsecured creditors?a. The signature of 12 creditors to whom the debtor owes at least $14,775 in unsecured debt.b. The signature of six creditors to whom the debtor owes at least $18,250 in unsecured debt.c. The signature of three creditors to whom the debtor owes at least $15,775 in unsecured debt.d. The signature of nine creditors to whom the debtor owes at least $23,225 in unsecured debt.Kheena Company filed a voluntary bankruptcy petition on June 1, 2022 and the statement of affairs reflects the following amounts: Assets pledged with fully secured creditors has a book value of P160,000 while the estimate( realizable value amounted to P190,000. Assets pledged with partially secured creditors has estimated realizable value of P60,000 with book value of P90,000. But the free assets amounted to P140,000 and P200,00 for the realizable and book value, respectively. Liabilities were as follows: Liabilities with priority 20,000 Fully Secured creditors 130,000 Partially secured creditors 100,000 Unsecured creditors 260,000 Q1. What is the estimated Recovery Percentage for Unsecured Creditors without Priority?
- Kheena Company filed a voluntary bankruptcy petition on June 1, 2022 and the statement of affairs reflects the following amounts: Assets pledged with fully secured creditors has a book value of P160,000 while the estimate( realizable value amounted to P190,000. Assets pledged with partially secured creditors has estimated realizable value of P60,000 with book value of P90,000. But the free assets amounted to P140,000 and P200,00 for the realizable and book value, respectively. Liabilities were as follows: Liabilities with priority 20,000 Fully Secured creditors 130,000 Partially secured creditors 100,000 Unsecured creditors 260,000 Q2. If the assets are converted into cash at the estimated realizable values, what is the ERP for partially secured creditors?Choose the correct. Which of the following is not a liability that has priority in a liquidation?a. Administrative expenses incurred during the liquidation.b. Salary payable of $1,250 per person owed to 26 employees.c. Payroll taxes due to the federal government.d. Advertising expense incurred before the company became insolvent but not recorded until after the order of relief.Oregon Corporation has filed a voluntary petition to reorganize under Chapter 11 of the Bankruptcy Reform Act. Its creditors are considering an attempt to force liquidation. The company currently holds cash of $6,000 and accounts receivable of $25,000. In addition, the company owns four plots of land. The first two (labeled A and B) cost $8,000 each. Plots C and D cost the company $20,000 and $25,000, respectively. A mortgage lien is attached to each parcel of land as security for four different notes payable of $15,000 each. Presently, the land can be sold for the following:Another $25,000 note payable is unsecured. Accounts payable at this time total $32,000. Of this amount, $12,000 is salary owed to the company’s workers. No employee is due more than $3,400.The company expects to collect $12,000 from the accounts receivable if liquidation becomes necessary. Administrative expenses required for liquidation are anticipated to be $16,000.a. Prepare a statement of financial affairs for…
- Oregon Corporation has filed a voluntary petition to reorganize under Chapter 11 of the Bankruptcy Reform Act. Its creditors are considering an attempt to force liquidation. The company currently holds cash of $6,000 and accounts receivable of $25,000. In addition, the company owns four plots of land. The first two (labeled A and B) cost $8,000 each. Plots C and D cost the company $20,000 and $25,000, respectively. A mortgage lien is attached to each parcel of land as security for four different notes payable of $15,000 each. Presently, the land can be sold for the following: Plot A . . . . . . . . . . . . . . . . . .. $16,000Plot B . . . . . . . . . . . . . . . . . .. $11,000Plot C . . . . . . . . . . . . . . . . . .. $14,000Plot D . . . . . . . . . . . . . . . . . . $27,000 Another $25,000 note payable is unsecured. Accounts payable at this time total $32,000. Of this amount, $12,000 is salary owed to the company’s workers. No employee is due more than $3,400.The company expects to…The following selected circumstances relate to pending lawsuits for Erismus, Incorporated Erismus’s fiscal year ends on December 31. Financial statements are issued in March 2025. Erismus prepares its financial statements according to U.S. GAAP. Required: Indicate the amount Erismus would record as an asset, a liability or if no accrual would be necessary in the following circumstances. Erismus is defending against a lawsuit. Erismus's management believes the company has a slightly worse than 50/50 chance of eventually prevailing in court, and that if it loses, the judgment will be $1,430,000. Erismus is defending against a lawsuit. Erismus's management believes it is probable that the company will lose in court. If it loses, management believes that damages could fall anywhere in the range of $2,830,000 to $5,660,000, with any damage in that range equally likely. Erismus is defending against a lawsuit. Erismus's management believes it is probable that the company will lose in court.…Which of the following is not a liability that has priority in a liquidation?a. Administrative expenses incurred during the liquidation.b. Salary payable of $1,250 per person owed to 26 employees.c. Payroll taxes due to the federal government.d. Advertising expense incurred before the company became insolvent but not recorded until after the order of relief.
- The unsecured creditors of Club Filipino Corporation filed a petition on July 1, 2021 to force the said corporation into bankruptcy. On December 31, 2021, Club Filipino is now in the process of preparing statement of affairs as mandated by the law. The carrying value and estimated fair values of the assets are as follows: Carrying Value Fair Value Cash P20,000 P20,000 Accounts Receivable 45,000 30,000 Inventory 60,000 35,000 Land 80,000 70,000 Building 150,000 100,000 Equipment 120,000 80,000 TOTAL…Gonne Corporation is being liquidated under Chapter 7 of the Bankruptcy Act. The trustee has determined that the unsecured claims will receive $.35 on the dollar. Odemay Corporation holds a $100,000 mortgage note receivable from Gonne that is secured by equipment with a $120,000 book value and a $75,000 fair value. How much of the mortgage receivable will be recovered by Odemay?On January 2, 2021, WCYU learned that National Insurance, which owed the practice $200,000 at December 31, 2020, had declared bankruptcy. Unfortunately, WCYU is not expected to recuperate any of the amount owing, given the amount of the other creditors involved in the bankruptcy. It is extremely rare for a major insurer to go bankrupt and as such WCYU had not set up an allowance for doubtful accounts in the past. Since the bankruptcy notice was not received until 2021, the 3 owners decided to write-off the whole amount in 2021. Is this correct? Explain why or why not. Include the correct computations if applicable.