A company preparing for a Chapter 7 liquidation has the following liabilities: H

Question

A company preparing for a Chapter 7 liquidation has the following liabilities:

  

  

  

  

How much will each of the company's liabilities be paid at liquidation?

Note A =

Note B =

Note C =

Admin Exp =

A/C Pay =

Inc Tax Pay =

• Note payable A of $116,000 secured by land having a book value of $63,000 and a fair value of $83,000. • Note payable B of $146,000 secured by a building having a $73,000 book value and a $53,000 fair value. • Note payable C of $73,000, unsecured. • Administrative expenses payable of $33,000. • Accounts payable of $133,000. • Income taxes payable of $43,000.

Explanation / Answer

Note A = 83,000 + 8,250 = 91,250

Note B = 53,000 + 23,250 = 76,250

Income Tax Payable = 23,000 + 20,000 = 43,000

admin expenses = 33,000

Note Payable C = 18,250

Account payable = 33,250

Working

Unsecured portion = 33,000 + 93,000 + 73,000 + 133,000 = 332,000

Amount left = 83,000

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.