Question
1. A company has the following balance sheet: Plant and equipment $500,000 Loans payable $150,000 Mortgage payable 300,000 _______ Shareholders equity 50,000 Total $500,000 Total
1. A company has the following balance sheet:
Plant and equipment | $500,000 | Loans payable | $150,000 |
|
| Mortgage payable | 300,000 |
| _______ | Shareholders equity | 50,000 |
Total | $500,000 | Total | $500,000 |
The plant and equipment has a realizable value of $350,000, and is pledged as security for the mortgage. The estimated deficiency to unsecured creditors is:
a. $ 50,000
b. $100,000
c. $150,000
d. $200,000
2. A company has the following balance sheet:
Inventory | $ 60,000 | Accounts payable | $ 75,000 |
Equipment, net | 150,000 | Loan payable | 180,000 |
_______ | Shareholders equity | (45,000) | |
Total | $210,000 | Total | $210,000 |
The inventory has a realizable value of $50,000, and the equipment has a realizable value of $140,000. The equipment secures the loan payable and the accounts payable are unsecured. The estimated deficiency to unsecured creditors is:
a. $115,000
b. $ 45,000
c. $140,000
d. $ 65,000
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