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E20-4 Chapter 7 Liquidation LO 20-3 Penn Inc.s assets have the carrying values and estimated fair values as follows: Carrying Value Fair Value Cash $
E20-4 Chapter 7 Liquidation LO 20-3
| Penn Inc.s assets have the carrying values and estimated fair values as follows: |
| Carrying Value | Fair Value | |||||
| Cash | $ | 16,600 | $ | 16,600 | ||
| Accounts Receivable | 61,200 | 51,300 | ||||
| Inventory | 91,400 | 65,400 | ||||
| Land | 100,100 | 81,024 | ||||
| Building (net) | 220,300 | 161,200 | ||||
| Equipment (net) | 251,500 | 100,900 | ||||
| Total | $ | 741,100 | $ | 476,424 | ||
| Penns debts follow: |
| Accounts Payable | $ | 96,900 | |
| Wages Payable (all have priority) | 9,400 | ||
| Taxes Payable | 14,200 | ||
| Notes Payable (secured by receivables and inventory) | 191,800 | ||
| Interest on Notes Payable | 5,800 | ||
| Bonds Payable (secured by land and building) | 221,800 | ||
| Interest on Bonds Payable | 11,200 | ||
| Total | $ | 551,100 | |
| Required: |
| a. | Prepare a schedule to calculate the net estimated amount available for general unsecured creditors. |
| b. | Compute the percentage dividend to general unsecured creditors. |
| c. | Prepare a schedule showing the amount to be paid each of the creditor groups upon distribution of the $476,424 estimated to be realizable. |
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