A company preparing for a Chapter 7 liquidation has the following liabilities: Note payable A of $130,000
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A company preparing for a Chapter 7 liquidation has the following liabilities:
- Note payable A of $130,000 secured by land having a book value of $70,000 and a fair value of $90,000.
- Note payable B of $160,000 secured by a building having a $80,000 book value and a $60,000 fair value.
- Note payable C of $80,000, unsecured.
- Administrative expenses payable of $40,000.
- Accounts payable of $140,000.
- Income taxes payable of $50,000.
The company also has these other assets:
- Cash of $30,000.
- Inventory of $140,000 but with a net realizable value of $80,000.
- Equipment of $130,000 but with a net realizable value of $70,000.
How much will each of the company's liabilities be paid at liquidation?
A company preparing for a Chapter 7 liquidation has the following liabilities:
- Note payable A of $130,000 secured by land having a book value of $70,000 and a fair value of $90,000.
- Note payable B of $160,000 secured by a building having a $80,000 book value and a $60,000 fair value.
- Note payable C of $80,000, unsecured.
- Administrative expenses payable of $40,000.
- Accounts payable of $140,000.
- Income taxes payable of $50,000.
The company also has these other assets:
- Cash of $30,000.
- Inventory of $140,000 but with a net realizable value of $80,000.
- Equipment of $130,000 but with a net realizable value of $70,000.
How much will each of the company's liabilities be paid at liquidation?
1. Payment on note payable A
2. Payment on note payable B
3. Payment on note payable C
4. Payment on administrative expenses
5. Payment on accounts payable
6. Payment on income taxes payable
Related Book For
Advanced Accounting
ISBN: 978-0077431808
10th edition
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
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