Check my work Check My Work button is now enabled5Item 5 Item 5 3 points Credito
ID: 2581697 • Letter: C
Question
Check my work Check My Work button is now enabled5Item 5 Item 5 3 points Creditors of Jones Corporation are considering petitioning the courts to force the company into Chapter 7 bankruptcy. The following information has been determined. Administrative expenses in connection with the liquidation are estimated to be $44,000. Book Value Net Realizable Value Cash $ 28,000 $ 28,000 Accounts receivable 54,000 40,000 Inventory 67,000 53,000 Supplies 25,000 0 Investments 24,000 30,000 Land 82,000 94,000 Buildings 112,000 90,000 Equipment 72,000 57,000 Notes payable (secured by land) 87,000 Notes payable (secured by buildings) 122,000 Bonds payable (secured by equipment) 159,000 Accounts payable 92,000 Salaries payable (two weeks’ salary for three employees) 28,000 Taxes payable 18,200 What is the amount of money that each class of creditors can anticipate receiving? Check my work Check My Work button is now enabled5Item 5 Item 5 3 points Creditors of Jones Corporation are considering petitioning the courts to force the company into Chapter 7 bankruptcy. The following information has been determined. Administrative expenses in connection with the liquidation are estimated to be $44,000.
book value net realiable value
What is the amount of money that each class of creditors can anticipate receiving?
free asssets
liabilities with priority
free assets after payment of liabilities priority
unsecured liabilities
paymnets of notes payable secure land
payments of note payablle secured by buldings
payments of bonds payable
payments of accounts payable
payments of salaries payable
payments of taxes payable
payments of administrative expenses
Cash $ 28,000 $ 28,000 Accounts receivable 54,000 40,000 Inventory 67,000 53,000 Supplies 25,000 0 Investments 24,000 30,000 Land 82,000 94,000 Buildings 112,000 90,000 Equipment 72,000 57,000 Notes payable (secured by land) 87,000 Notes payable (secured by buildings) 122,000 Bonds payable (secured by equipment) 159,000 Accounts payable 92,000 Salaries payable (two weeks’ salary for three employees) 28,000 Taxes payable 18,200What is the amount of money that each class of creditors can anticipate receiving?
free asssets
liabilities with priority
free assets after payment of liabilities priority
unsecured liabilities
paymnets of notes payable secure land
payments of note payablle secured by buldings
payments of bonds payable
payments of accounts payable
payments of salaries payable
payments of taxes payable
payments of administrative expenses
Explanation / Answer
Book value $ Realisable value $ Cash 28,000 28,000 Accounts receivable 54,000 40,000 Inventory 67,000 53,000 Supplies 25,000 0 Investments 24,000 30,000 Land 82,000 94,000 Buildings 112,000 90,000 Equipment 72,000 57,000 Notes payable (secured by land) 87,000 Notes payable (secured by buildings) 122,000 Bonds payable (secured by equipment) 159,000 Accounts payable 92,000 Salaries payable (two weeks’ salary for three employees) 28,000 Taxes payable 18,200 Assets specifically pledged: Estimated realisation Due to secured creditors Deficiency ranked as unsecured Surplus Land - Notes payable (secured by land) 94000 87000 7000 Buildings - Notes payable (secured by buildings) 90000 122000 -32000 Equipment - Bonds payable (secured by equipment) 57000 159000 -102000 -134000 Realisable value of assets not specifically charged: Estimated realisation Asset description $ Cash 28,000 Accounts receivable 40,000 Inventory 53,000 Supplies - Investments 30,000 Add: Surplus from assets specifically pledged 7,000 Total realisation 158,000 A Less: Liquidation expense (44,000) B Net Realisation amount 114,000 C=A-B Less: Payment to Priority creditors- Wages Taxes Payable 18,200 Salaries Payable 28,000 Total priority creditors payable 46,200 D Net surplus available to unsecured creditors 67,800 C-D Amount due to Unsecured creditors: Deficiency from assets charged Notes payable 134000 Accounts Payable 92000 Total 226000 Summary: 1 Amount that each class of creditors will get: $ a. Notes payable secured by Land will get their full due of $87000 b. Creditors of notes payable secured by building will get only $90000 c. Creditors of bonds payable secured by Equipment will get only $57000 d. Other trade creditors & balance of Notes payable and bonds payable creditros would have to share $67800 out of their total due $226000 2 The liabilities with priority are fully paid (taxes payable $18200, Salaries payable for 2 weeks $28000) 3 Admin expenses on liquidation of $44,000 will be fully paid