Chap 13 - back of the chapter

Chap 13 - back of the chapter - Chapter 13 - Accounting for...

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Unformatted text preview: Chapter 13 - Accounting for Legal Reorganizations and Liquidations 22.(10 Minutes) (Distribution of cash in a liquidation) Free Assets: Current Assets ............................................................ $ 35,000 Buildings and Equipment .......................................... 110,000 Total ...................................................................... $145,000 Liabilities with Priority: Administrative Expenses .......................................... $ 20,000 Salaries Payable (only $3,000 per employee).......... 6,000 Income Taxes .............................................................. 8,000 Total ...................................................................... $ 34,000 Free Assets After Payment of Liabilities with Priority ($145,000 $34,000) .................................................. $111,000 Unsecured Liabilities Notes Payable (in excess of value of security) ...... $ 30,000 Accounts Payable ...................................................... 85,000 Bonds Payable ............................................................ 70,000 Total ...................................................................... $185,000 Percentage of Unsecured Liabilities To Be Paid: $111,000/$185,000 = 60 % Payment On Notes Payable: Value of Security (land) ............................................. $ 90,000 60% of Remaining $30,000 ........................................ 18,000 Total Collected by holders ........................................ $108,000 23.(5 Minutes) (Distribution of assets in a liquidation) Liabilities with Priority Paid firstadministrative expense................................ $2,450 Paid secondwages up to a maximum of $10,950 for Mr. Key..................................................... 16,950 All remaining moneygovernment claims to unpaid taxes 5800 Total of free assets..................................................... $25,200 13-1 Chapter 13 - Accounting for Legal Reorganizations and Liquidations No payments will be made in connection with the remainder of the salaries, the government claims and all of the unsecured accounts payable since no money is left. 24.(8 Minutes) (Distribution of assets to partially secured creditors) Free Assets: Other Assets ............................................................... $ 80,000 Excess from Assets Pledged with Fully Secured Creditors ($116,000 $70,000) ............................ 46,000 Total ...................................................................... $126,000 Liabilities with Priority .................................................... $ 42,000 Free Assets after Payment of Liabilities with Priority ($126,000 $42,000) ................................................... $ 84,000 Unsecured Liabilities: Excess of Partially Secured Liabilities Over Pledged Assets ($130,000 $50,000) ................................ $ 80,000 Unsecured Creditors .................................................. 200,000 Total ......................................................................Total ....
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This note was uploaded on 09/28/2011 for the course ACC 431 taught by Professor Talbert during the Spring '08 term at National.

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Chap 13 - back of the chapter - Chapter 13 - Accounting for...

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