1.) Because of inability to pay its debts, the Nopay Manufacturing Company has been forced into bankruptcy as of April 1, 2009. The balance sheet on the date shows:

Cash - 2,700

Accounts Receivable 39,350

Notes Receivable - 18,500

Inventories - 87,850

Prepaid Expenses - 950

Land and Building - 61,250

Equipment - 48,800

Accounts Payable - 52,500

Notes Payable - Bank 15,000

Notes Payable - Suppliers 51,250

Accrued Wages - 1,850

Accrued taxes - 4,650

Mortgage bond payable - 90,000

Common stock P10 par - 75,000

Deficit- (30,850)

Additional information:

• Accounts receivable of 16,950 and notes receivable of 12,500 are expected to be collectible. The good notes are pledged to the bank
• Inventories are expected to bring 45,100 when sold under bankruptcy
• Land and buildings have an appraised value of 95,000 they serve as security on the bonds
• The current value of the equipment, net of disposal cost is 9,000

Determine the ff:

a. The estimated total loss on assets sold at less than book value is?

b. The estimated gain on asset sold at more than book value is?

c. What is the estimated payment to creditors?

d. The expected recovery percentage is?

2.) Dart, Inc. a closely held corporation was undergoing liquidation. The total cash value of Dart's bankruptcy estate after the sale of all the assets and payment of administrative expenses is 100,000

Dart has the following creditors:

Francon Bank is owed 75,000 on a mortgage loan secured by Dart's real property. The property was valued at and sold in bankruptcy for 70,000

The BIR has a 12,000 recorded judgement for unpaid corporate income tax

JOG office supplies has an unsecured claim of 3,000 that was timely filed

Nanstar Electric Company has an unsecured claim of 10,000 that was timely filed

Decoy Publications has a claim of 16,000 which is secured by Dart's Inventory that was valued and sold in bankruptcy for 2,000. The claim was timely filed.

Determine the ff:

a. Calculate the total amount recoverable by partially secured creditors

b. Calculate the total amount recoverable by unsecured creditors with priority

c. Calculate the total amount recoverable by fully secured creditors

d. Calculate the total amount recoverable by unsecured creditors without priority