A company that was to be liquidated had the following liabilities: Income Taxes $10,000 Notes Payable secured
Question:
A company that was to be liquidated had the following liabilities:
Income Taxes | $10,000 |
|
Notes Payable secured by land | 100,000 |
|
Accounts Payable | 50,000 |
|
Salaries Payable ($12,000 for Employee # 1 and $2,000 for Employee # 2) | 14,000 |
|
Administrative expenses for liquidation | 20,000 |
|
|
|
|
The company had the following assets: | Book Value | Fair Value |
Current Assets | $100,000 | 95,000 |
Land | 50,000 | 75,000 |
Building | 150,000 | 200,000 |
1.
Total assets, available to pay liabilities with priority and unsecured creditors, are calculated to be what amount?
a. $75,000.
b. $270,000.
c. $275,000.
d. $295,000.
e. $370,000.
2.Assets available for unsecured creditors after payments of liabilities with priority are calculated to be what amount?
a. $226,000.
b. $247,050.
c. $251,000.
d. $251,275.
e. $275,000.
3. A Chapter 7 bankruptcy is a(n)
a. Involuntary reorganization.
b. Bankruptcy forced by a company's creditors.
c. Liquidation.
d. Bankruptcy in which all creditors receive payment in full.
e. Voluntary reorganization.
Managing Information Technology
ISBN: 978-0131789548
6th edition
Authors: Carol Brown, Daniel W. DeHayes, Jeffrey A. Hoffer, Wainright E. Martin, William C. Perkins