Consider the information for Evans, Inc. when the company entered bankruptcy proceedings: Account Balance per Books Dr
Fantastic news! We've Found the answer you've been seeking!
Question:
Consider the information for Evans, Inc. when the company entered bankruptcy proceedings:
Account | Balance per Books Dr (Cr) |
---|---|
Cash | $30,500 |
Accounts receivable | 600,000 |
Inventory | 100,000 |
Prepaid expenses | 14,200 |
Buildings, net | 800,000 |
Equipment, net | 125,000 |
Goodwill | 100,000 |
Wages payable | (80,000) |
Taxes payable | (45,000) |
Accounts payable | (980,000) |
Notes payable | (305,000) |
Common stock | (800,000) |
Retained earnings—deficit | 440,300 |
Total | $0 |
Inventory with a book value of $240,000 and realizable value of $35,000 is security for notes payable of $50,000. The equipment secures the remaining notes payable. Expected realizable values of the assets are:
Accounts receivable | $400,000 |
Inventory | 150,000 |
Buildings | 340,000 |
Equipment | 75,000 |
The prepaid expenses and goodwill have a realizable value of zero. The entire wages payable balance is a priority liability.
Required
Compute the estimated deficiency to unsecured creditors.
Do not use negative signs with any of your answers below.
Assets pledged to fully-secured creditors | Answer |
Less: Liabilities to fully-secured creditors | Answer |
Available as free assets | Answer |
Unpledged assets | Answer |
Less: Unsecured liabilities with priority | Answer |
Net free assets | Answer |
Liabilities to partially-secured creditors | Answer |
Less: Assets pledged to partially-secured creditors | Answer |
Unsecured portion | Answer |
Unsecured liabilities | Answer |
Total unsecured liabilities | Answer |
Estimated deficiency to unsecured creditors | Answer |
Related Book For
Posted Date: