ADVANCED ACCOUNTING
13th Edition
ISBN: 9781260773033
Author: Hoyle
Publisher: MCG
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Question
Chapter 13, Problem 52P
a.
To determine
Prepare a statement of realization and liquidation for the period from March 14, 2017, through July 23, 2017.
b.
To determine
Find how much cash would be paid to an unsecured, non-priority creditor that Lynch, Inc., owes a total of $1,000.
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Students have asked these similar questions
Use the trial balance presented for Lynch, Inc., in problem (51). Assume that the company will be liquidated and the following transactions will occur:
• Accounts receivable of $18,000 are collected with remainder written off.
• All of the company’s inventory is sold for $40,000.
• Additional accounts payable of $10,000 incurred for various expenses such as utilities and maintenance are discovered.
• The land and building are sold for $71,000.
• The note payable due to the Colorado Savings and Loan is paid.
• The equipment is sold at auction for only $11,000 with the proceeds applied to the note owed to the First National Bank.
• The investments are sold for $21,000.
• Administrative expenses total $20,000 as of July 23, 2017, but no payment has yet been made.
a. Prepare a statement of realization and liquidation for the period from March 14, 2017, through July 23, 2017.
b. How much cash would be paid to an unsecured, nonpriority creditor that Lynch, Inc., owes a total of $1,000?
The Walston Company is to be liquidated. It has the following liabilities:
Income taxes
$
9,400
Notes payable (secured by land)
134,000
Accounts payable
92,000
Salaries payable (evenly divided between two employees)
13,000
Bonds payable
77,000
Administrative expenses for liquidation
27,000
The company has the following assets:
Book Value
Fair Value
Current assets
$
87,000
$
42,000
Land
107,000
97,000
Buildings and equipment
107,000
131,000
How much money will the holders of the notes payable collect following liquidation?
Use the following information for questions 6 and 7:
On December 31, 2018, Garnel Co. is in financial difficulty and
cannot pay a note due that day. It is a $600,000 note with $60,000
actrued interest payable to Fred Co.. Fred agrees to accept from
Garnel a building that has a fair value of $590,000, an original cost
of $530,000, and accumulated depreciation of $130,000.
Garnel should recognize a gain or loss on the disposal of the
building of
Select one:
O a. $0.
O b. $70,000 loss.
O c. $60,000 gain.
O d. $190,000 gain
Chapter 13 Solutions
ADVANCED ACCOUNTING
Ch. 13 - What does the term insolvent mean?Ch. 13 - Why should a company monitor the reporting of...Ch. 13 - Prob. 3QCh. 13 - Prob. 4QCh. 13 - Prob. 5QCh. 13 - Prob. 6QCh. 13 - What federal legislation governs most bankruptcy...Ch. 13 - What are the primary objectives of a bankruptcy...Ch. 13 - A bankruptcy case can begin with either a...Ch. 13 - A bankruptcy court enters an order for relief. How...
Ch. 13 - What is the difference between fully secured...Ch. 13 - Prob. 12QCh. 13 - Prob. 13QCh. 13 - What is the difference between a Chapter 7...Ch. 13 - What is the purpose of a statement of financial...Ch. 13 - In a bankruptcy liquidation, what actions does the...Ch. 13 - A trustee for a company that is being liquidated...Ch. 13 - If a company is not required to follow U.S. GAAP,...Ch. 13 - Prob. 19QCh. 13 - In determining whether a company needs to use the...Ch. 13 - In following the liquidation basis of accounting,...Ch. 13 - How does a company report its assets when the...Ch. 13 - What does the term debtor in possession mean?Ch. 13 - Who can develop reorganization plans in a Chapter...Ch. 13 - Prob. 25QCh. 13 - Prob. 26QCh. 13 - In a bankruptcy proceeding, what is a cram down?Ch. 13 - Prob. 28QCh. 13 - During reorganization, how should a companys...Ch. 13 - Prob. 30QCh. 13 - Prob. 31QCh. 13 - Under what conditions does a company that is...Ch. 13 - Prob. 33QCh. 13 - Prob. 34QCh. 13 - What are the objectives of the bankruptcy laws in...Ch. 13 - Prob. 2PCh. 13 - Prob. 3PCh. 13 - In a bankruptcy, which of the following statements...Ch. 13 - Prob. 5PCh. 13 - An involuntary bankruptcy petition must be filed...Ch. 13 - An order for relief creates an automatic stay that...Ch. 13 - Prob. 8PCh. 13 - Which of the following is the minimum limitation...Ch. 13 - On a statement of financial affairs, how are...Ch. 13 - What is a debtor in possession? a. The holder of a...Ch. 13 - How are anticipated administrative expenses...Ch. 13 - Prob. 13PCh. 13 - Which of the following is not an expected function...Ch. 13 - What is an inherent limitation of the statement of...Ch. 13 - What is a cram down? a. An agreement about the...Ch. 13 - Prob. 17PCh. 13 - Prob. 18PCh. 13 - Prob. 19PCh. 13 - How are assets to be reported when the liquidation...Ch. 13 - The New England Company has a debt to a bank of...Ch. 13 - On a balance sheet prepared for a company during...Ch. 13 - Which of the following is not a reorganization...Ch. 13 - What accounting is made for professional fees...Ch. 13 - Which of the following is necessary for a company...Ch. 13 - Prob. 26PCh. 13 - For a company emerging from bankruptcy, how are...Ch. 13 - The Walston Company is to be liquidated and has...Ch. 13 - Prob. 29PCh. 13 - Prob. 30PCh. 13 - Prob. 31PCh. 13 - Mondesto Company has the following debts:...Ch. 13 - A statement of financial affairs created for an...Ch. 13 - A company preparing for a Chapter 7 liquidation...Ch. 13 - Olds Company declares Chapter 7 bankruptcy. The...Ch. 13 - A company going through a Chapter 7 bankruptcy has...Ch. 13 - Pumpkin Company is going through bankruptcy...Ch. 13 - Prob. 38PCh. 13 - Prob. 39PCh. 13 - Kansas City Corporation holds three assets when it...Ch. 13 - Prob. 41PCh. 13 - Prob. 42PCh. 13 - Prob. 43PCh. 13 - Prob. 44PCh. 13 - The following balance sheet has been prepared by...Ch. 13 - Prob. 46PCh. 13 - Prob. 47PCh. 13 - The following balance sheet has been produced for...Ch. 13 - Prob. 49PCh. 13 - Prob. 50PCh. 13 - Prob. 51PCh. 13 - Prob. 52PCh. 13 - Holmes Corporation has filed a voluntary petition...
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