Assets Cash Inventory Land Buildings Equipment Book Value $ 33,000 55,000 170,000 230,000 164,000 Fair Value Note payable (due 2022) Stockholders' equity $ 33,000 57,000 220,000 270,000 167,000 Liabilities as of the date of the order for relief Accounts payable Accrued expenses Income taxes payable Note payable (due 2023, secured by land) Note payable (due 2025) Liabilities since the date of the order for relief Accounts payable Allowed Claims $ $ 133,000 $ 40,000 32,000 110,000 180,000 Expected Settlement 70,000 120,000 30,000 14,000 28,000 110,000 90,000
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- Big Corp. has been undergoing liquidation since December 1, 2020. As of July 31, 2021, the following data are available: P1,500,000 Liabilities not liquidated Liabilities to be liquidated P1,700,000 Assets acquired Assets realized P2,400,000 P2,250,000 Assets not realized P1,375,000 Liabilities assumed P2,625,000 Assets to be realized P2,750,000 Liabilities liquidated P1,750,000 Supplementary charges/debits P2,750,000 Supplementary credits P3,800,000 Answer the following questions: (answers can be repeated) Compute the ending cash balance of cash account (as of July 31, 2021) assuming that Choose... common stock and deficits are P2,750,000 and P750,000, respectively. What is the net gain/(loss) of Big Corp. from the liquidation? Choose...Jaez Corporation is in the process of going through a reorganization. As of December 31, 2024, the company’s accountant has determined the following information although the company is still several months away from emerging from the bankruptcy proceeding. Net Book Value Fair Value Assets Cash $ 31,000 $ 31,000 Inventory 53,000 55,000 Land 164,000 218,000 Buildings 228,000 268,000 Equipment 162,000 165,000 Allowed Claims Expected Settlement Liabilities as of the date of the order for relief Accounts payable $ 131,000 $ 28,000 Accrued expenses 38,000 12,000 Income taxes payable 30,000 26,000 Note payable (due 2027, secured by land) 108,000 108,000 Note payable (due 2029) 178,000 88,000 Liabilities since the date of the order for relief Accounts payable $ 68,000 Note payable (due 2026) 118,000 Stockholders' equity Common stock $ 208,000 Deficit (241,000) Required: Prepare the balance sheet for Jaez…On December 18, 2020, the statement of affairs of Facebook Company, which is in bankruptcy liquidation, included in the following:Assets pledges for fully secured liabilities P100,000Assets pledged for partially secured liabilities P40,000Free Assets P120,00Fully secured liabilities P80,000Partially Secured Liabilities P50,000Unsecured Liabilities with Priority P60,000Unsecured Liabilities without Priority P90,000Compute the estimated amount to be paid to:Fully Unsecured Partially UnsecuredSecured Liabilities Secured LiabilitiesLiabilities w/ Priority Liabilities W/out PriorityA . P80,000 P60,000 P50,000 P70,000B. P64,000 P60,000 P48,000 P88,000C. P80,000 P48,000 P60,000 P72,000D. P80,000 P60,000 P48,000 P72,000
- Jaez Corporation is in the process of going through a reorganization. As of December 31, 2017, the company’s accountant has determined the following information although the company is still several months away from emerging from the bankruptcy proceeding. Prepare a balance sheet in the appropriate form.ngent Rover Ltd has a year-end of 30 June 2022. The accountant has prepared the following schedule with details of several events and their proposed treatment in the financial statements. Event Proposed Treatment The notification of a customer's Write off $30,000 debt as it is irrecoverable. bankruptcy who owes $25,000 on 30 June 2022 and now owes $30,000. The liquidator has indicated that the debt will not be recoverable. A major production plant was destroyed by fire on 1 July 2022. No adjustment or reference to the issue is required as the fire took place after the year-end. Liability for dividends payable recognised. Ordinary dividends declared on 1 August 2022 regarding profits for the period ended 30 June 2022. Discovery of a significant fraud on 15 July 2022, resulting in losses to the company. No adjustment is required as the fraud was discovered after the period end. Required: In each of the instances above, explain whether the accountant has proposed the correct treatment…Rothschild Chair Company, was indebted to First Lincoln Bank under a $20 million, 10% unsecured note. The note was signed January 1, 2011, and was due December 31, 2024. Annual interest was paid on December 31, 2019. At January 1, 2021, Rothschild Chair Company was experiencing severe financial difficulties and negotiated a restructuting of the terms of the debt agreement. REQUIRED: Prepare all journal entries by First Lincoln Bank to record the restructuring and any remaining transactions, for current and future years, relating to the debt under each of the independent circumstances below: 1.-First Linconl Bank agreed to settle the debt in exchange for land having a fair value of $16 million but carried on Rothschild Chair company's book at $13 million 2.-First Lincoln Bank agreed to a) forgive the interest accrued from last year, b) reduce the remaining four interest payments to $1 million each, and c) reduce the principal to $15 million
- After the end of the reporting period, prior to authorizing for issue the financial statementsof Chubby the Piggy Ltd for the year ended 31 March 20X7 the following issues were raised:1. The notification of the bankruptcy of a customer: The balance of trade receivablesdue from the customer at 31 March 20X7 was $23,000 and at the date of thenotification it was $25,000. No payment is expected from the bankruptcyproceedings.2. Sales of some items of product ChoCoCo were made at a price of $5,40 each in Apriland May 20X7. Sales staff receives a commission of 15% of the sales price on theseproducts. At 31 March 20X7 the company had 12,000 units of this product ininventory included at cost of $6 each.3. The company is being sued by an employee who lost a limb in an accident while atwork on March 15 20X7. The company is contesting the claim as the employee wasnot following the safety procedures that he had been instructed to follow.Accordingly the financial statements include a note of a…Morley Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2020. Amortized cost $50,000 Fair value 40,000 Expected credit loss 12,000 a. What is the amount of the credit loss that Morley should report on this available-for-sale security at December 31, 2020? b. Prepare the journal entry to record the credit loss, if any (and any other adjustment needed), at December 31, 2020. c. Assume that the fair value of the available-for-sale security is $53,000 at December 31, 2020, instead of $40,000. What is the amount of the credit loss that Morley should report at December 31, 2020? d. Assume the same information as for part (c). Prepare the journal entry to record the credit loss, if necessary (and any other adjustment needed), at December 31, 2020.Kheena Company filed a voluntary bankruptcy petition on June 1, 2022 and the statement of affairs reflects the following amounts: Assets pledged with fully secured creditors has a book value of P160,000 while the estimate( realizable value amounted to P190,000. Assets pledged with partially secured creditors has estimated realizable value of P60,000 with book value of P90,000. But the free assets amounted to P140,000 and P200,00 for the realizable and book value, respectively. Liabilities were as follows: Liabilities with priority 20,000 Fully Secured creditors 130,000 Partially secured creditors 100,000 Unsecured creditors 260,000 Q2. If the assets are converted into cash at the estimated realizable values, what is the ERP for partially secured creditors?
- Kheena Company filed a voluntary bankruptcy petition on June 1, 2022 and the statement of affairs reflects the following amounts: Assets pledged with fully secured creditors has a book value of P160,000 while the estimate( realizable value amounted to P190,000. Assets pledged with partially secured creditors has estimated realizable value of P60,000 with book value of P90,000. But the free assets amounted to P140,000 and P200,00 for the realizable and book value, respectively. Liabilities were as follows: Liabilities with priority 20,000 Fully Secured creditors 130,000 Partially secured creditors 100,000 Unsecured creditors 260,000 Q1. What is the estimated Recovery Percentage for Unsecured Creditors without Priority?Tamarisk Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2020. Amoortization cost $52,100 Fair Value 44,200 Expected credit losses 12,850 What is the amount of the credit loss that Tamarisk should report on this available-for-sale security at December 31, 2020? Prepare the journal entry to record the credit loss, if any (and any other adjustment needed), at December 31, 2020. Assume that the fair value of the available-for-sale security is $57,200 at December 31, 2020, instead of $44,200. What is the amount of the credit loss that Tamarisk should report at December 31, 2020? Assume the same information as for part (c). Prepare the journal entry to record the credit loss, if necessary (and any other adjustment needed), at December 31, 2020.At January 1, 2024, Rothschild Chair Company, Incorporated, was indebted to First Lincoln Bank under a $35 million, 12% unsecured note. The note was signed January 1, 2021, and was due December 31, 2027. Annual interest was last paid on December 31, 2022. Rothschild Chair Company was experiencing severe financial difficulties and negotiated a restructuring of the terms of the debt agreement. Required: Prepare all journal entries by Rothschild Chair Company, Incorporated, to record the restructuring and any remaining transactions relating to the debt under each of the independent circumstances below: 1. First Lincoln Bank agreed to settle the debt in exchange for land having a fair value of $31 million but carried on Rothschild Chair Company's books at $26.5 million. 2. First Lincoln Bank agreed to (a) forgive the interest accrued from last year, (b) reduce the remaining four interest payments to $1 million each, and (c) reduce the principal to $28.5 million. 3. First Lincoln Bank…