A statement of financial affairs created for an insolvent corporation that is beginning the process of liquidation discloses the following data (assets are shown at net realizable values):
Assets pledged with fully secured creditors . . . . . . . . . . . . . . . . . . . | $220,000 |
Fully secured liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 160,000 |
Assets pledged with partially secured creditors . . . . . . . . . . . . . . . | 390,000 |
Partially secured liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 510,000 |
Assets not pledged . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 310,000 |
Unsecured liabilities with priority . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 182,800 |
Accounts payable (unsecured) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 400,000 |
- a. This company owes $13,000 to an unsecured creditor (without priority). How much money can this creditor expect to collect?
- b. This company owes $120,000 to a bank on a note payable that is secured by a security interest attached to property with an estimated net realizable value of $90,000. How much money can this bank expect to collect?
a.
Find how much money this creditor can expect to collect.
Explanation of Solution
Computation of the amount which the creditor can expect to collect:
Working note:
Computation of available amount of assets:
Computation of amount for unsecured creditors:
Computation of total unsecured liabilities:
Computation of percentage for unsecured creditors:
b.
Find how much money this bank can expect to collect.
Explanation of Solution
Computation of the amount which the bank can expect to collect:
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Chapter 13 Solutions
ADVANCED ACCTG W/CONNECT CODE >BI<
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