Xavier Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $25,200 in free cash. The following debts, totaling $38,050, remain: Government claims to unpaid taxes Salary during last month owed to Mr. Key (not an officer) Administrative expenses Salary during last month owed to Ms. Rankin (not an officer) Unsecured accounts payable $6,000 17,825 2,450 5,225 6,550 Indicate how much money will be paid to the creditor associated with each debt. (Be
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- hi Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $27,400 in free cash. The following debts, totaling $49,050, remain: Government claims to unpaid taxes $ 8,200 Salary during last month owed to Mr. Key(not an officer) 20,025 Administrative expenses 4,650 Salary during last month owed to Ms. Rankin (not an officer) 7,425 Unsecured accounts payable 8,750 Indicate how much money will be paid to the creditor associated with each debt.Xavier Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $26,200 in free cash. The following debts, totaling $43,050, remain:Government claims to unpaid taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,000Salary during last month owed to Mr. Key (not an officer) . . . . . . . . . 19,200Administrative expenses . . . .. . . 3,450Salary during last month owed to Ms. Rankin (not an officer) . . . . . . 5,850Unsecured accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,550Indicate how much money will be paid to the creditor associated with each debt.Xavier Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $27,200 in free cash. The following debts, totaling $48,050, remain: Government claims to unpaid taxes $ 8,000 Salary during last month owed to Mr. Key (not an officer) 19,825 Administrative expenses 4,450 Salary during last month owed to Ms. Rankin (not an officer) 7,225 Unsecured accounts payable 8,550 Indicate how much money will be paid to the creditor associated with each debt.
- 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…Olds Company declares Chapter 7 bankruptcy. The following are the asset and liability book values at that time. Administrative expenses are estimated to be $20,000: The holders of note payable B want to collect at least $129,000. To achieve this goal, how much does the company have to receive in the liquidation of its equipment?
- The following events occurred for Scythian, Inc. between its December 31, 2022 year-end and the issuance of its financial statements on February 28, 2023: Event 1: The company settled a disagreement with the Internal Revenue Service regarding income taxes payable for 2021. Scythian had accrued income taxes payable of $3,000,000. The settlement requires payment of $3,200,000. Event 2: The company’s 3rd largest customer abruptly declared bankruptcy because of the CEO’s embezzlement of company funds. At year-end, the customer owed Scythian $1,200,000 but had made a payment of $400,000 in January 2023. Event 3: Employees at one of the company’s largest plants went on strike in January 2023. The strike is expected to cost the company between $500,000 and $1,000,000 in lost revenue. What is the net effect of these events on 2022 net income?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.Telstar Co. had severe financial difficulties and was considering the possibility of filing a bankruptcy petition. At that time, the company had the following assets (stated at net realizable value) and liabilities. Assets (pledged against debts of $91,000) 150,800 Assets (pledged against debts of $169,000) 65,000 Other assets 104,000 Liabilities with priority 54,600 Unsecured creditors 60,000 A. Prepare a schedule to show the amount of total assets available to pay liabilities with priority and unsecured creditors B. Prepare a schedule to show the amount of assets that are available for unsecured creditors after payment of liabilities with priority C. Prepare a schedule to show the amount of total unsecured liabilities D. Prepare a schedule…
- At the time it defaulted on its interest payments and filed for bankruptcy, the McDaniel Mining Company had the balance sheet shown here (in thousands of dollars). The court, after trying unsuccessfully to reorganize the firm, decided that the only recourse was liquidation under Chapter 7. Sale of the fixed assets, which were pledged as collateral to the mortgage bondholders, brought in $400,000, while the current assets were sold for another $200,000. Thus, the total proceeds from the liquidation sale were $600,000. The trustee’s costs amounted to $50,000; no single worker was due more than the maximum allowable wages per worker; and there were no unfunded pension plan liabilities. a. How much will McDaniel’s shareholders receive from the liquidation? (SHOW ALL WORK). b. How much will the mortgage bondholders receive? (SHOW ALL WORK). c. Who are the other priority claimants (in addition to the mortgage bondholders)? How much will they receive from the liquidation? (SHOW ALL…At the time it defaulted on its interest payments and filed for bankruptcy, the McDaniel Mining Company had the balance sheet shown here (in thousands of dollars). The court, after trying unsuccessfully to reorganize the firm, decided that the only recourse was liquidation under Chapter 7. Sale of the fixed assets, which were pledged as collateral to the mortgage bondholders, brought in $400,000, while the current assets were sold for another $200,000. Thus, the total proceeds from the liquidation sale were $600,000. The trustee’s costs amounted to $50,000; no single worker was due more than the maximum allowable wages per worker; and there were no unfunded pension plan liabilities. Balance Sheet (Thousands of Dollars) Current assets $ 400 Accounts payable $50 Net fixed assets 600 Accrued taxes 40 Accrued wages 30 Notes Payable 180 Total current liabilities 300 First-mortgage bonds $300 Second-mortgage bonds 200 Debentures 200…At the time it defaulted on its interest payments and filed for bankruptcy, the McDaniel Mining Company had the balance sheet shown here (in thousands of dollars). The court, after trying unsuccessfully to reorganize the firm, decided that the only recourse was liquidation under Chapter 7. Sale of the fixed assets, which were pledged as collateral to the mortgage bondholders, brought in $400,000, while the current assets were sold for another $200,000. Thus, the total proceeds from the liquidation sale were $600,000. The trustee’s costs amounted to $50,000; no single worker was due more than the maximum allowable wages per worker; and there were no unfunded pension plan liabilities. How much will each general creditor receive from the distribution before subordination adjustment and what is the effect of adjusting for subordination? (SHOW ALL WORK).