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FM12 Ch 24 Tool Kit - A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15...

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9/8/2006 Chapter 24. Tool Kit for Bankruptcy, Reorganization, and Liquidation Table 24-3 Columbia Software Company: Balance Sheets as of March 31, 2007 Assets Current assets $3,500,000 Net fixed assets $12,500,000 Other assets $700,000 Total assets $16,700,000 Liabilities and Equity Accounts payable $1,000,000 Accrued taxes $250,000 Notes payable $250,000 Other current liabilities $1,750,000 7.5% first mortgage bonds, due 2013 $6,000,000 9% subordinated debentures, due 2008 $7,000,000 Total liabilities $16,250,000 Common stock ($1 par) $1,000,000 Paid-in-capital $3,450,000 Retained earnings ($4,000,000) Total liabilities and equity $16,700,000 Reorganization Plan Table 24-4 Columbia Software Company: Reorganization Plan Senior Claims Taxes $250,000 Paid off by Moreland Mortgage bonds $6,000,000 Assumed by Moreland Notes payable $250,000 $75,000 $250,000 3,333 100% Unsecured creditors $2,750,000 $825,000 $825,000 11,000 30% Subordinated debentures $7,000,000 $2,100,000 $1,925,000 25,667 28% $10,000,000 $3,000,000 $3,000,000 40,000 30% REORGANIZATION IN BANKRUPTCY (Section 24.5) Columbia Software Company is a regional firm that specializes in selling, installing, and servicing accounting software. Table 24-4 gives Columbia's balance sheet as of March 31, 2007. The company had been suffering losses running to $2.5 million a year, and the asset values in the balance sheet are overstated relative to their market values.
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