ACCP 472 Test Bank Chapter 18 13) Faled Company has the following assets and lia

Question

ACCP 472 Test Bank Chapter 18 13) Faled Company has the following assets and liabilities, stated at fair value in liquidation. Assets pledged with secured creditors Assets pledged with partially secured creditors Other assets Secured liabilities Partially secured liabilities Unsecured liabilities with priority Unsecured liabilities $ 100,000 75,000 160,000 50,000 110,000 80,000 215,000 Reqursine the amount of cash that will be available to pay unsecured creditors, and the percentage of unsecured liabilities that will be paid. ciher assess 1 60 poo

Explanation / Answer

Total Assets of Company $ 335000 Total secured and partial secured liabilities $ 160000 Free assets $ 175000 Less: Unsecured Liabilities with Priority $ 80000 Assets Value left for Unsecured Liabilities $ 95000 % which would be paid = $ 95000/215000= 44.18%

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