Pretzels-R-Us Inc. is trying to decide whether to seek liquidation or reorganization. Hampton has provided the...

 

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Pretzels-R-Us Inc. is trying to decide whether to seek liquidation or reorganization. Hampton has provided the following balance sheet: Pretzels-R-Us Inc. Balance Sheet 23-Feb-18 Current Assets: Cash Investments Accounts receivable Inventory Prepaid expenses Plant & Equipment Land Building Equipment Intangibles Total assets 1,000 28,000 46,500 72,000 4,200 151,700 65,000 180,000 75,300 320,300 78,000 550,000 A. Calculate the total assets available to pay liabilities with priority and unsecured creditors. Cash Investments Accounts receivable Inventory Prepaid expenses Land Building Equipment Intangibles Total assets available B. Calculate the total liabilities with and without priority. Current Liabilities: Accounts payable Accrued expenses Notes payable (secured by inventory) Long-term Liabilities Notes payable (secured by land and building) Stockholders' Equity Common stock Retained earnings (deficit) Total Liabilities and S Equity 127,000 99,000 68,000 100,000 (144,000) 294,000 300,000 (44,000) 550,000 Details about some of the balance sheet data: 1. The investments are currently worth $13,000. 2. It is estimated that $32,000 of the accts rec. are collectible. 3. The inventory can be sold for $74,000. 4. The prepaid expenses and the intangible assets have no NRV 5. The land and building are currently valued at 265,000 6. The equipment can be sold for $65,000 B. Calculate the total liabilities with and without priority. Priority No priority Accounts payable Accrued expenses TOTALS C. Calculate the payout % to unsecured creditors [round to nearest whole $] D. Calculate the payout for the note payable secured by the land and building [Round to nearest whole $] 7. Admin expenses (not yet recorded) are estimated as $12,500 8. Accrued expenses include $17,000 of salaries payable ($11K to one employee and $3K each to two other employees). 9. Accrued expenses include $7,000 of unpaid payroll taxes E. Prepare a Statement of Financial Affairs Pretzels-R-Us Inc. Statement of Financial Affairs 23-Feb-18 Starting point: Original book value [from given data] Assets Available for Unsecured Creditors Pretzels-R-Us Inc. is trying to decide whether to seek liquidation or reorganization. Hampton has provided the following balance sheet: Pretzels-R-Us Inc. Balance Sheet 23-Feb-18 Current Assets: Cash Investments Accounts receivable Inventory Prepaid expenses Plant & Equipment Land Building Equipment Intangibles Total assets 1,000 28,000 46,500 72,000 4,200 151,700 65,000 180,000 75,300 320,300 78,000 550,000 A. Calculate the total assets available to pay liabilities with priority and unsecured creditors. Cash Investments Accounts receivable Inventory Prepaid expenses Land Building Equipment Intangibles Total assets available B. Calculate the total liabilities with and without priority. Current Liabilities: Accounts payable Accrued expenses Notes payable (secured by inventory) Long-term Liabilities Notes payable (secured by land and building) Stockholders' Equity Common stock Retained earnings (deficit) Total Liabilities and S Equity 127,000 99,000 68,000 100,000 (144,000) 294,000 300,000 (44,000) 550,000 Details about some of the balance sheet data: 1. The investments are currently worth $13,000. 2. It is estimated that $32,000 of the accts rec. are collectible. 3. The inventory can be sold for $74,000. 4. The prepaid expenses and the intangible assets have no NRV 5. The land and building are currently valued at 265,000 6. The equipment can be sold for $65,000 B. Calculate the total liabilities with and without priority. Priority No priority Accounts payable Accrued expenses TOTALS C. Calculate the payout % to unsecured creditors [round to nearest whole $] D. Calculate the payout for the note payable secured by the land and building [Round to nearest whole $] 7. Admin expenses (not yet recorded) are estimated as $12,500 8. Accrued expenses include $17,000 of salaries payable ($11K to one employee and $3K each to two other employees). 9. Accrued expenses include $7,000 of unpaid payroll taxes E. Prepare a Statement of Financial Affairs Pretzels-R-Us Inc. Statement of Financial Affairs 23-Feb-18 Starting point: Original book value [from given data] Assets Available for Unsecured Creditors

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ANSWER Ttl libilities re the mbined debts nd bligtins tht n individul r mny wes t utside rties Every... View the full answer