Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 13, Problem 33P
A statement of financial affairs created for an insolvent corporation that is beginning the process of liquidation discloses the following data (assets are shown at net realizable values):
Assets pledged with fully secured creditors . . . . . . . . . . . . . . . . . . . | $220,000 |
Fully secured liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 160,000 |
Assets pledged with partially secured creditors . . . . . . . . . . . . . . . | 390,000 |
Partially secured liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 510,000 |
Assets not pledged . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 310,000 |
Unsecured liabilities with priority . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 182,800 |
Accounts payable (unsecured) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 400,000 |
- a. This company owes $13,000 to an unsecured creditor (without priority). How much money can this creditor expect to collect?
- b. This company owes $120,000 to a bank on a note payable that is secured by a security interest attached to property with an estimated net realizable value of $90,000. How much money can this bank expect to collect?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
A statement of financial affairs created for an insolventcorporation that is beginning the process of liquidation disclosesthe following data (assets are shown at net realizable values):
Assets pledged withfully secured creditors
$
220,000
Fully securedliabilities
160,000
Assets pledged withpartially secured creditors
390,000
Partially securedliabilities
510,000
Assets notpledged
310,000
Unsecuredliabilities with priority
182,800
Accounts payable(unsecured)
400,000
a.
This company owes $13,000 to an unsecured creditor (withoutpriority). How much money can this creditor expect to collect?
b.
This company owes $120,000 to a bank on a note payable that issecured by a security interest attached to property with anestimated net realizable value of $90,000. How much money can thisbank expect to collect?
A statement of financial affairs created for an insolvent corporation that is beginning the process of liquidation discloses the following
data. The assets are shown at net realizable values.
Assets pledged with fully secured creditors
Fully secured liabilities
Assets pledged with partially secured creditors
Partially secured liabilities
Assets not pledged
Unsecured liabilities with priority
Accounts payable (unsecured)
$ 230,000
165,000
395,000
520,000
315,000
189,200
405,000
a. The company owes $18,000 on an account payable to an unsecured creditor (without priority). How much money can this creditor
expect to collect?
b. The company owes $130,000 to a bank on a note payable that is secured by a security interest attached to property with an
estimated net realizable value of $95,000. How much money can the bank expect to collect?
a. Expected amount by creditor
b. Expected amount by bank
Casper Blueprinting, Inc., has filed under Chapter 7 of the Bankruptcy Code. The estimated net realizable value of its assets is as follows:Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 23,000Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,000Inventory and supplies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000Blueprinting equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114,000Furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000Computer hardware and software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,000Deliver vehicle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,000Total. . . . . . . . . . . . . . . . .…
Chapter 13 Solutions
Advanced Accounting
Ch. 13 - What does the term insolvent mean?Ch. 13 - Why should a company monitor the reporting of...Ch. 13 - Prob. 3QCh. 13 - Prob. 4QCh. 13 - Prob. 5QCh. 13 - Prob. 6QCh. 13 - What federal legislation governs most bankruptcy...Ch. 13 - What are the primary objectives of a bankruptcy...Ch. 13 - A bankruptcy case can begin with either a...Ch. 13 - A bankruptcy court enters an order for relief. How...
Ch. 13 - What is the difference between fully secured...Ch. 13 - Prob. 12QCh. 13 - Prob. 13QCh. 13 - What is the difference between a Chapter 7...Ch. 13 - What is the purpose of a statement of financial...Ch. 13 - In a bankruptcy liquidation, what actions does the...Ch. 13 - A trustee for a company that is being liquidated...Ch. 13 - If a company is not required to follow U.S. GAAP,...Ch. 13 - Prob. 19QCh. 13 - In determining whether a company needs to use the...Ch. 13 - In following the liquidation basis of accounting,...Ch. 13 - How does a company report its assets when the...Ch. 13 - What does the term debtor in possession mean?Ch. 13 - Who can develop reorganization plans in a Chapter...Ch. 13 - Prob. 25QCh. 13 - Prob. 26QCh. 13 - In a bankruptcy proceeding, what is a cram down?Ch. 13 - Prob. 28QCh. 13 - During reorganization, how should a companys...Ch. 13 - Prob. 30QCh. 13 - Prob. 31QCh. 13 - Under what conditions does a company that is...Ch. 13 - Prob. 33QCh. 13 - Prob. 34QCh. 13 - What are the objectives of the bankruptcy laws in...Ch. 13 - Prob. 2PCh. 13 - Prob. 3PCh. 13 - In a bankruptcy, which of the following statements...Ch. 13 - Prob. 5PCh. 13 - An order for relief creates an automatic stay that...Ch. 13 - Prob. 8PCh. 13 - Which of the following is the minimum limitation...Ch. 13 - On a statement of financial affairs, how are...Ch. 13 - What is a debtor in possession? a. The holder of a...Ch. 13 - How are anticipated administrative expenses...Ch. 13 - Prob. 13PCh. 13 - Which of the following is not an expected function...Ch. 13 - What is an inherent limitation of the statement of...Ch. 13 - What is a cram down? a. An agreement about the...Ch. 13 - Prob. 17PCh. 13 - Prob. 18PCh. 13 - Prob. 19PCh. 13 - How are assets to be reported when the liquidation...Ch. 13 - The New England Company has a debt to a bank of...Ch. 13 - On a balance sheet prepared for a company during...Ch. 13 - Which of the following is not a reorganization...Ch. 13 - What accounting is made for professional fees...Ch. 13 - Which of the following is necessary for a company...Ch. 13 - Prob. 26PCh. 13 - For a company emerging from bankruptcy, how are...Ch. 13 - The Walston Company is to be liquidated and has...Ch. 13 - Prob. 29PCh. 13 - Prob. 30PCh. 13 - Prob. 31PCh. 13 - Mondesto Company has the following debts:...Ch. 13 - A statement of financial affairs created for an...Ch. 13 - A company preparing for a Chapter 7 liquidation...Ch. 13 - Olds Company declares Chapter 7 bankruptcy. The...Ch. 13 - A company going through a Chapter 7 bankruptcy has...Ch. 13 - Pumpkin Company is going through bankruptcy...Ch. 13 - Prob. 38PCh. 13 - Prob. 39PCh. 13 - Kansas City Corporation holds three assets when it...Ch. 13 - Prob. 41PCh. 13 - Prob. 42PCh. 13 - Prob. 43PCh. 13 - Prob. 44PCh. 13 - The following balance sheet has been prepared by...Ch. 13 - Prob. 46PCh. 13 - Prob. 47P
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- A statement of financial affairs created for an insolvent corporation that was beginning the liquidation process disclosed the following data (assets were shown at net realizable values): Assets pledged with fully secured creditors $265,000 Fully secured liabilities 200,000 Assets pledged with partially secured creditors 497,000 Partially secured liabilities 641,000 Free assets 400,000 Unsecured liabilities with priority 210,000 Unsecured liabilities 670,000 Required: Prepare a schedule to show the amount available for unsecured creditors after payment of liabilities with priority.arrow_forwardJack Company is a corporation that was organized on July 1, 2015. The June 30, 2020, balance sheet for Jack is as follows:AssetsInvestments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . $ 400,500Accounts receivable . . . . . . . . . . . . . . . . .$1,250,000Allowance for doubtful account. . . . . . . (300,000) 950,000Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500,000Prepaid insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 18,000Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,000Machinery and equipment (net) . . . . . . . . . . . . . . . .. . . . . . . 1,473,500Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$4,500,000Liabilities and EquityCurrent…arrow_forwardThe following data were taken from the statement of realization and liquidation of Rise Heart Company for the quarter ended September 30, 2021. 000.0 Liabilities to be liquidated Supplementary credits Liabilities not liquidated Supplementary debits Assets acquired Liabilities assumed P1,825,000 845,000 1,000,000 620,500 880,500 770,000 8- 737,500 Assets to be realized lopiJ bas noitesilso wolad ew 875,000 1,595,000 Assets realized Liabilities liquidated The beginning balances of ordinary shares and retained earnings are P520,000 and P(148,000), respectively. The net income for the period is P104,500. How much is the ending cash balance? 000,.08 botslarrow_forward
- The trial balance of Kroeger Incorporated included the following accounts as of December 31, 2024: Sales revenue Interest revenue Gain on sale of investments Gain on debt securities Cost of goods sold Loss on projected benefit obligation Selling expense Goodwill impairment loss Interest expense General and administrative expense Debits Credits $ 8,350,000 55,000 115,000 137,500 $ 155,000 6,155,000 750,000 525,000 25,000 450,000 The gain on debt securities represents the increase in the fair value of debt securities and is classified a component of other comprehensive income. Kroeger had 300,000 shares of stock outstanding throughout the year. Income tax expense has not yet been recorded. The effective tax rate is 25%. Required: Prepare a 2024 separate statement of comprehensive income for Kroeger Incorporated. Note: Amounts to be deducted should be indicated with a minus sign. KROEGER INCORPORATED Statement of Comprehensive Income For the Year Ended December 31, 2024 Net income Other…arrow_forwardProblem No. 5 DAP Company started operation on January 1, 2018 and acquired the following securities: Trading Securities Portfolio Abad Company Aquino Company Lacierda Company Fair value P2,400,000 2,600,000 1,900,000 Fair value FVTOCI Portfolio Coloma Company Soliman Company Villanueva Company P3,050,000 2,725,000 1,875,000 No disposals were made during 2018. The fair values of the investment securities as of December 31, 2018 are as follows: Trading Securities Portfolio Abad Company Aquino Company Lacierda Company Fair value P2,380,000 2,600,000 1,870,000 Page |S/TOCI Portfolio Coloma Company Soliman Company Villanueva Company Fair value P3,070,000 2,737,500 1,871,000 The following additional transactions happened in 2019: On September 1, DAP Company sold its Aquino Company securities for P2,590,000. On October 1, DAP Company exchanged it Soliman Company portfolio for a piece of land. The carrying amount of the land was P1,937,500 an a zonal value of P2,777,500. At the time of…arrow_forwardThe following data were taken from the Statement of Affairs of Honesty Company: Shareholders' equity Bonds Payable without security Salaries Payable Loss on realization of assets Accounts payable without security Taxes Estimated Liquidation expenses Determine the estimated amount payable to the holder of the bonds. P441,000 735,000 50,000 551,250 367,500 72,500 55,125arrow_forward
- Instructions: (Assume all transactions during the year were for cash.) a. Prepare the journal entry to record the sale of the available-for-sale debt securities in 2020. b. Prepare the journal entry to record the Unrealized Holding Gain or Loss for 2020. c. Prepare a statement of comprehensive income for 2020. d. Prepare a balance sheet as of December 31, 2020arrow_forwardA company going through a Chapter 7 bankruptcy has the following account balances: Cash . . . . . . . . . . . . . . . . . . $ 30,000 Receivables (30% collectible) . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . 50,000Inventory (worth $39,000) . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 90,000Land (worth $120,000) (secures note payable) . . . . . . . . . . . . . . . 100,000Buildings (worth $180,000) (secures bonds payable) . . . . . . . . . . 200,000. Salaries payable (Four workers owed equal amounts for last two weeks) . . . 10,000Accounts payable . . . . . . . . . .90,000Note payable (secured by land) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110,000Bonds payable (secured by building) . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . 100,000Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . .…arrow_forwardCoop Incorporated has the following assets and liabilities (assets are stated at net realizable value): Assets pledged with secured creditors $ 80,000 Assets pledged with partially secured creditors 70,000 Other assets 180,000 Secured liabilities 40,000 Partially secured liabilities 95,000 Liabilities with priority 55,000 Unsecured liabilities 225,000 In a liquidation, what is the amount of free assets after payment of liabilities with priority? A. $180,000 B. $165, 000 C. $70,000 D. $95,000 E. $160,000arrow_forward
- The creditors of Chester Company agree to accept promissorynotes for the amount of its indebtedness with a provisothat two-thirds of the annual profits must be appliedto their liquidation. How should these notes be reportedon the balance sheet of the issuing company? Give a reasonfor your answer.arrow_forwardThe trial balance of Kroeger Incorporated included the following accounts as of December 31, 2024: Sales revenue Interest revenue. Gain on sale of investments Gain on debt securities Loss on projected benefit obligation Cost of goods sold Selling expense Goodwill impairment loss. Interest expense General and administrative expense Debits $ 165,000 6,050,000 650,000 475,000 35,000 550,000 Credits $ 8,250,000 65,000 125,000 142,500 The gain on debt securities represents the increase in the fair value of debt securities and is classified a component of other comprehensive income. Kroeger had 300,000 shares of stock outstanding throughout the year. Income tax expense has not yet been recorded. The effective tax rate is 25%. Required: Prepare a 2024 single, continuous statement of comprehensive income for Kroeger Incorporated. Use a multiple-step income statement format.arrow_forwardThe following data were taken from the statement of realization and liquidation of DLR Corporation for the quarter that ended September 30, 2022: Assets to be realized Assets acquired Assets Realized Assets not realized Liabilities to be liquidated Liabilities assumed Liabilities liquidated Liabilities not liquidated Supplementary credits Supplementary charges 495,000 540,000 630,000 225,000 810,000 270,000 305,000 675,000 765,000 937,000 As of September 30, 2022, DLR's capital stock is P450,000 and retained earnings is P432,000. No additional shares were issued after that date. b. (252,000) c. (315,000) d. 315,000 20. What is the ending cash balance? a. 1,305,000 b. 840,000 c. 1,050,000 d. 1,080,000 19. What is the net income (loss) for the period? a. 252,000arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
What is liquidity?; Author: The Finance Storyteller;https://www.youtube.com/watch?v=XtjS7CfUSsA;License: Standard Youtube License