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Accounting for Legal Reorganizations and Liquidations Chapter 13 Advanced Accounting-Unit 6 Assignment

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Question;Accounting for Legal Reorganizations and Liquidations Chapter 13 Advanced Accounting-Unit 6 AssignmentProblem 13-22 [LO3;LO5, LO6];A company is to be;liquidated and has the following liabilities;Income taxes;$;10,200;Notespayable (secured by land);162,000;Accounts;payable;106,000;Salaries;payable (evenly divided between twoemployees);27,000;Bonds;payable;91,000;Administrative expenses for liquidation;41,000;The company has the;following assets;Book Value;Fair Value;Current;assets;$;101,000;$;56,000;Land;121,000;111,000;Buildings;and equipment;121,000;171,000;How much money will;the holders of the notes payable collect following the liquidation?;Total;amount collected;$;Problem 13-23 [LO3;LO6];Xavier;Company is going through a Chapter 7bankruptcy. All assets have been;liquidated, and the company retains only $25,800 infree;cash.;The following debts, totaling $41,050, remain;Government;claims to unpaid taxes;$;6,600;Salary;during last month owed to Mr. Key (not an officer);18,425;Administrative expenses;3,050;Salary;during last month owed to Ms. Rankin (not an officer);5,825;Unsecured;accountspayable;7,150;Indicate;how much money will be paid to the creditor associated with eachdebt.(Be sure to list;liabilities in the order of priority.);(Click to select);Salary during last month owed to Ms. Rankin;Administrative expenses;Government claims to unpaid taxes;Salary during last month owed to Mr. Key;Unsecured accounts payable;(Click to select);Unsecured accounts payable;Government claims to unpaid taxes;Salary during last month owed to Ms. Rankin;Salary during last month owed to Mr. Key and Ms. Rankin;Administrative expenses;(Click to select);Unsecured accounts payable;Salary during last month owed to Ms. Rankin;Administrative expenses;Salary during last month owed to Mr. Key;Government claims to unpaid taxes;Problem 13-24 [LO3;LO5];Ataway;Company has severefinancial difficulties and is;considering filing abankruptcy petition. At this;time, it has the following assets (stated at net realizable value) and;liabilities;Assets;(pledged against debts of $72,000);$;120,000;Assets;(pledged against debts of $134,000);52,000;Other;assets;82,000;Liabilities;with priority;59,000;Unsecured;creditors;202,000;In a liquidation, how;much money would be paid on the partiallysecured;debt?;Payment on;partially secureddebt;$;Problem 13-25 [LO3, LO5, LO6];Chesterfield;Company has cash of $69,000, inventory worth $128,000, and a building worth;$149,000. Unfortunately, the company also has accountspayable of $199,000, a note;payable of $99,000 (secured by the inventory), liabilities with priority of;$26,600, and a bond payable of $188,000 (secured by the building).;How;muchmoney will the holder of;the bond expect to receive?;Total amountreceived bybond holders;$;Problem 13-26 [LO3;LO6];Mondesto Company has;the following;Unsecured creditors;$;238,000;Liabilities;with priority;118,000;Secured;liabilities;Debt;1, $226,000, value of pledged asset;188,000;Debt;2, $188,000, value of pledged asset;108,000;Debt;3, $128,000, value of pledged asset;156,000;The;company also has a number of other assets that are not pledged in any way.;Thecreditors holding Debt 2 want;to receive at least $161,600.;For;how much do thesefree assets have to be;sold so that the creditors associatedwith;Debt;2 receive exactly $161,600?(Round your percentageanswers in calculations to the nearest whole percent.);Sale price;$;Problem 13-27 [LO3;LO5];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;$;250,000;Fully;secured liabilities;175,000;Assets;pledged with partially secured creditors;405,000;Partially;secured liabilities;540,000;Assets not;pledged;325,000;Unsecured;liabilities with priority;235,000;Accounts payable (unsecured);415,000;a.;This;company owes $28,000 to an unsecured creditor (without priority). How much;money can this creditor expect to collect?;Expected;amount by creditor;$;b.;This;company owes $150,000 to abank on a notepayable that is secured by asecurity interest attached to;property with an estimated net realizable value of $105,000. How much money;can this bank expect to collect?;Expected;amount by bank;$;Problem 13-31 [LO8];Pumpkin;Company is going throughbankruptcyreorganization. It has a $310,000;notepayable incurred prior to the;order for relief. The company believes that the note will be settled for;$82,000 in cash. It is also possible that thecreditor will instead take a;piece of land that cost the company $72,000 but is worth $94,000. On abalance sheet during the;reorganization period, identify the legitimate amount that can be claimed by;the creditors.;$310,000;$176,000;$228,000;$82,000;Problem 13-32 [LO9];A company is coming;out of reorganization with the following accounts;Book;Value;Fair Value;Receivables;$;93,000;$;116,000;Inventory;213,000;236,000;Buildings;313,000;426,000;Liabilities;313,000;313,000;Common;stock;343,000;Additional;paid-in capital;46,000;Retained earnings (deficit);(83,000);The;company?s assets have a $833,000 reorganization value. As part of the;reorganization, the company?s owners transferred 75 percent of the;outstanding stock to the creditors.;Prepare;the journalentry that is necessary to;adjust the company's records to freshstart accounting.;General;Journal;Debit;Credit;(Click to select);Retained Earnings;Buildings;Additional Paid-in Capital;Goodwill;Inventory;Receivables;Note Payable;Depreciation Expense;(Click to select);Note Payable;Depreciation Expense;Buildings;Goodwill;Inventory;Additional Paid-in Capital;Retained Earnings;Receivables;(Click to select);Depreciation Expense;Note Payable;Goodwill;Inventory;Receivables;Additional Paid-in Capital;Buildings;Retained Earnings;(Click to select);Additional Paid-in Capital;Goodwill;Note Payable;Depreciation Expense;Retained Earnings;Receivables;Inventory;Buildings;(Click to select);Note Payable;Goodwill;Depreciation Expense;Receivables;Additional Paid-in Capital;Buildings;Retained Earnings;Inventory;(Click to select);Receivables;Note Payable;Additional Paid-in Capital;Inventory;Buildings;Depreciation Expense;Retained Earnings;Goodwill;Problem 13-33 [LO8];Addison;Corporation is currently going through a Chapter 11bankruptcy. The company has the;followingaccount balances for the;current year.;Debit;Credit;Advertising expense;$;43,000;Cost of;goods sold;230,000;Depreciation;expense;41,000;Interest;expense;7,000;Interest;revenue;$;41,000;Loss on;closing of branch;128,000;Professional fees;90,000;Rent;expense;35,000;Revenues;600,000;Salaries;expense;89,000;Prepare;an income statement for this organization. The effective tax rate is 20;percent (realization of any tax benefits is anticipated).(Amounts to be deducted;and losses should be indicated with minussign, except individual expenses which should be;entered as positive values.);ADDISON CORPORATION;Income Statement;(Click to select);Revenues;Professional fees;Rent expense;Salaries;Interest expense;Cost of goods sold;Depreciation expense;Advertising expense;$;Costs and expenses;(Click to select);Loss on closing of branch;Rent expense;Interest expense;Advertising expense;Professional fees;Depreciation expense;Salaries;Cost of goods sold;$;(Click to select);Advertising expense;Professional fees;Depreciation expense;Salaries;Interest expense;Rent expense;Cost of goods sold;Loss on closing of branch;(Click to select);Salaries;Rent expense;Cost of goods sold;Depreciation expense;Professional fees;Advertising expense;Loss on closing of branch;Interest expense;(Click to select);Rent expense;Professional fees;Interest expense;Loss on closing of branch;Depreciation expense;Cost of goods sold;Salaries;Advertising expense;(Click to select);Rent expense;Loss on closing of branch;Professional fees;Advertising expense;Salaries;Interest expense;Cost of goods sold;Depreciation expense;(Click to select);Loss on closing of branch;Depreciation expense;Salaries;Rent expense;Cost of goods sold;Interest expense;Professional fees;Advertising expense;Earnings;before reorganization items and tax effects;Reorganization;items;(Click to select);Salaries;Interest revenue;Cost of goods sold;Advertising expense;Loss on closing of branch;Depreciation expense;Rent expense;Professional fees;(Click to select);Interest revenue;Professional fees;Loss on closing of branch;Depreciation expense;Advertising expense;Cost of goods sold;Rent expense;Salaries;(Click to select);Depreciation expense;Loss on closing of branch;Professional fees;Cost of goods sold;Salaries;Rent expense;Advertising expense;Interest revenue;(Click to select);Profit before income tax benefit;Loss before income tax benefit;(Click to select);Cost of goods sold;Professional fees;Loss on closing of branch;Rent expense;Interest revenue;Income tax benefit;Revenues;Salaries;(Click to select);Net income;Net loss;$;Problem 13-35 [LO8];Jaez Corporation is in the process of going through a;reorganization. As of December 31, 2013, the company?s accountant hasdetermined the following;information although the company is still several months away from emerging;from thebankruptcy proceeding.;Book;Value;Fair Value;Cash;$ 32,000;$ 32,000;Inventory;54,000;56,000;Land;167,000;219,000;Buildings;229,000;269,000;Equipment;163,000;166,000;Allowed;Claims;Expected;Settlement;Liabilities;as of the date of the order for relief;Accounts payable;$;132,000;$;29,000;Accrued;expenses;39,000;13,000;Income;taxes payable;31,000;27,000;Note;payable (due 2016, secured by land);109,000;109,000;Note;payable (due 2018);179,000;89,000;Liabilities;since the date of the order for relief;Accounts;payable;$;69,000;Note;payable (due 2015);119,000;Stockholders?;equity;Common;stock;$;209,000;Deficit;(242,000);Prepare abalance;sheet;in appropriate form.(Be sure to list assets and liabilities in the order of their;liquidity. Negative amounts should be indicated by a minus sign.);JAEZ CORPORATION;Balance Sheet;December 31, 2013;Current;Assets;(Click to select);Land;Equipment;Goodwill;Inventory;Cash;Buildings;Accounts Payable;Accounts Receivable;$;(Click to select);Accounts Payable;Land;Buildings;Goodwill;Equipment;Inventory;Cash;Accounts Receivable;$;Land;Buildings, and Equipment;(Click to select);Inventory;Cash;Goodwill;Buildings;Equipment;Accounts Receivable;Accounts Payable;Land;(Click to select);Buildings;Goodwill;Inventory;Equipment;Cash;Accounts Receivable;Land;Accounts Payable;(Click to select);Inventory;Goodwill;Buildings;Accounts Payable;Accounts Receivable;Cash;Land;Equipment;Total;Assets;$;Liabilities;not Subject to Compromise;Current;Liabilities;(Click to select);Cash;Accounts Receivable;Retained Earnings;Inventory;Note Payable;Common Stock;Additional Paid in Capital;Accounts Payable;Long-term;Liabilities;(Click to select);Cash;Note Payable (due 2015);Note Payable (due 2016);Inventory;Accounts Payable;Accounts Receivable;Note Payable (due 2018);Land;$;(Click to select);Accounts Payable;Accounts Receivable;Note Payable (due 2015);Note Payable (due 2016);Inventory;Cash;Note Payable (due 2018);Land;Total;$;Liabilities;Subject to Compromise;(Click to select);Accrued Expenses;Buildings;Income Taxes Payable;Inventory;Note Payable (due 2018);Land;Cash;Accounts Payable;(Click to select);Accrued Expenses;Buildings;Cash;Accounts Payable;Inventory;Land;Income Taxes Payable;Note Payable (due 2018);(Click to select);Inventory;Accrued Expenses;Accounts Payable;Income Taxes Payable;Cash;Note Payable (due 2018);Buildings;Land;(Click to select);Income Taxes Payable;Accounts Payable;Inventory;Cash;Buildings;Note Payable (due 2018);Land;Accrued Expenses;Total;Liabilities;Stockholders;Equity;(Click to select);Accounts Receivable;Buildings;Retained Earnings (deficit);Accounts Payable;Patents;Inventory;Common Stock;Cash;$;(Click to select);Accounts Payable;Common Stock;Retained Earnings (deficit);Buildings;Cash;Patents;Inventory;Accounts Receivable;Total;Liabilities and Shareholders' (deficit);$;Problem 13-36 [LO9];Ristoni;Company is in the process of emerging from a Chapter 11bankruptcy. It will apply fresh;start accounting as of December 31, 2013. The company currently has 21,000;shares of common stock outstanding with a $189,000 par value. As part of the;reorganization, the owners will contribute 17,000 shares of this stock back;to the company. A retained earnings deficit balance of $588,000 exists at the;time of this reorganization.;The;company has the following asset accounts;Book;Value;Fair Value;Accounts;receivable;$;102,000;$;56,000;Inventory;114,000;101,000;Land and;buildings;362,000;423,000;Equipment;56,000;43,000;The;company?s liabilities will be settled as follows. Assume that all notes will;be issued at reasonableinterest;rates.;?;Accounts;payable of $91,000 will be settled with a note for $8,000. These creditors;will also get 2,000shares of the stock;contributed by the owners.;?;Accrued;expenses of $46,000 will be settled with a note for $7,000.;?;Note;payable of $111,000 (due 2017) was fully secured and has not been;renegotiated.;?;Note;payable of $305,000 (due 2016) will be settled with a note for $61,000 and;10,000 shares of the stock contributed by the owners.;?;Note;payable of $280,000 (due 2014) will be settled with a note for $82,000 and;5,000 shares of the stock contributed by the owners.;?;Note;payable of $200,000 (due 2015) will be settled with a note for $121,000.;The company has a;reorganization value of $726,000.;Prepare;all journal entries for Ristoni so that the company can emerge from the;bankruptcy proceeding.(Do not round intermediate calculations. Round your answers to the;nearest dollar amount.);General Journal;Debit;Credit;To;adjust accounts to market value as part of fresh start;accounting.;(Click to select);Common Stock;Equipment;Accounts Payable;Accounts Receivable;Inventory;Goodwill;Land and Buildings;Additional Paid-in Capital;(Click to select);Additional Paid-in Capital;Common Stock;Goodwill;Land and Buildings;Equipment;Accounts Receivable;Accounts Payable;Inventory;(Click to select);Goodwill;Equipment;Common Stock;Additional Paid-in Capital (to balance);Land and Buildings;Inventory;Accounts Payable;Accounts Receivable;(Click to select);Land and Buildings;Goodwill;Accounts Payable;Accounts Receivable;Common Stock;Inventory;Equipment;Additional Paid-in Capital (to balance);(Click to select);Inventory;Goodwill;Accounts Receivable;Common Stock;Land and Buildings;Equipment;Additional Paid-in Capital (to balance);Accounts Payable;(Click to select);Inventory;Accounts Receivable;Common Stock;Additional Paid-in Capital (to balance);Accounts Payable;Goodwill;Equipment;Land and Buildings;To record;shares turned in upon reorganization.;(Click to select);Accounts Payable;Common Stock;Goodwill;Additional Paid in Capital;Equipment;Accounts Receivable;Inventory;Land and Buildings;(Click to select);Accounts Receivable;Land and Buildings;Common Stock;Goodwill;Additional Paid in Capital;Accounts Payable;Inventory;Equipment;To record;settlement of accounts payable.;(Click to select);Equipment;Additional Paid in Capital;Gain on Debit Discharge;Inventory;Note Payable;Accounts Receivable;Common Stock;Accounts Payable;(Click to select);Additional Paid-in Capital;Accounts Receivable;Goodwill;Gain on Debt Discharge;Inventory;Common Stock;Note Payable;Land and Buildings;(Click to select);Common Stock;Goodwill;Accounts Receivable;Land and Buildings;Inventory;Gain on Debt Discharge;Note Payable;Additional Paid-in Capital;(Click to select);Goodwill;Note Payable;Inventory;Land and Buildings;Gain on Debt Discharge;Accounts Receivable;Additional Paid-in Capital;Common Stock;(Click to select);Common Stock;Note Payable;Gain on Debt Discharge;Additional Paid-in Capital;Goodwill;Accounts Receivable;Inventory;Land and Buildings;To;record settlement of accrued expenses.;(Click to select);Additional Paid in Capital;Inventory;Common Stock;Accrued Expenses;Equipment;Accounts Receivable;Goodwill;Land and Buildings;(Click to select);Accounts Receivable;Land and Buildings;Common Stock;Inventory;Gain on Debt Discharge;Goodwill;Note Payable;Additional Paid-in Capital;(Click to select);Goodwill;Accounts Receivable;Gain on Debt Discharge;Common Stock;Land and Buildings;Note Payable;Inventory;Additional Paid-in Capital;To;record settlement of note payable due in 2016.;(Click to select);Note Payable;Additional Paid-in Capital;Common Stock;Land and Buildings;Equipment;Accounts Receivable;Inventory;Gain on Debit Discharge;(Click to select);Common Stock;Land and Buildings;Inventory;Additional Paid-in Capital;Goodwill;Accounts Receivable;Note Payable;Gain on Debt Discharge;(Click to select);Inventory;Note Payable;Accounts Receivable;Common Stock;Additional Paid-in Capital;Goodwill;Land and Buildings;Gain on Debt Discharge;(Click to select);Additional Paid-in Capital;Accounts Receivable;Note Payable;Goodwill;Common Stock;Gain on Debt Discharge;Inventory;Land and Buildings;(Click to select);Goodwill;Land and Buildings;Accounts Receivable;Additional Paid-in Capital;Note Payable;Inventory;Gain on Debt Discharge;Common Stock;To;record settlement of note payable due in 2014.;(Click to select);Equipment;Accounts Receivable;Note Payable;Common Stock;Inventory;Land and Buildings;Additional Paid in Capital;Gain on Debit Discharge;(Click to select);Goodwill;Accounts Payable;Note Payable;Additional Paid-in Capital;Common Stock;Inventory;Gain on Debt Discharge;Land and Buildings;(Click to select);Goodwill;Additional Paid-in Capital;Land and Buildings;Note Payable;Inventory;Gain on Debt Discharge;Accounts Payable;Common Stock;(Click to select);Gain on Debt Discharge;Common Stock;Note Payable;Inventory;Additional Paid-in Capital;Land and Buildings;Goodwill;Accounts Payable;(Click to select);Goodwill;Additional Paid-in Capital;Accounts Payable;Land and Buildings;Gain on Debt Discharge;Note Payable;Common Stock;Inventory;To;record settlement of note payable due in 2015.;(Click to select);Gain on Debit Discharge;Additional Paid in Capital;Equipment;Note Payable;Accounts Receivable;Land and Buildings;Inventory;Common Stock;(Click to select);Accounts Receivable;Equipment;Note Payable;Common Stock;Gain on Debt Discharge;Inventory;Goodwill;Land and Buildings;(Click to select);Accounts Receivable;Common Stock;Gain on Debt Discharge;Note Payable;Land and Buildings;Goodwill;Equipment;Inventory;To;adjust additional paid in capital,close out gain;deficit;balance.;(Click to select);Additional Paid-in Capital;Gain on Debt Discharge;Retained Earnings;Land and Buildings;Inventory;Equipment;Common Stock;Goodwill;(Click to select);Land and Buildings;Goodwill;Gain on Debt Discharge;Equipment;Retained Earnings;Inventory;Common Stock;Additional Paid-in Capital;(Click to select);Common Stock;Retained Earnings;Accounts Receivable;Additional Paid in Capital;Inventory;Land and Buildings;Goodwill;Equipment

 

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