Question
Olds Company declares Chapter 7 bankruptcy. The following are the asset and liability book values at that time. Administrative expenses are estimated to be $18,000:
Olds Company declares Chapter 7 bankruptcy. The following are the asset and liability book values at that time. Administrative expenses are estimated to be $18,000:
| Cash | $ | 30,000 | |
| Accounts receivable | 66,000 | (worth $34,000) | |
| Inventory | 76,000 | (worth $62,000) | |
| Land (secures note A) | 206,000 | (worth $166,000) | |
| Building (secures bonds) | 406,000 | (worth $332,000) | |
| Equipment | 126,000 | (worth unknown) | |
| Accounts payable | 186,000 | ||
| Taxes payable to government | 26,000 | ||
| Note payable A | 182,000 | ||
| Note payable B | 256,000 | ||
| Bonds payable | 306,000 | ||
The holders of note payable B want to collect at least $128,000.
To achieve this goal, how much does the company have to receive in the liquidation of its equipment?
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Financial Holding Company Audit Compliance And Risk Management
Authors: Anthony Ludovic Assassa
1st Edition
6206122727, 978-6206122722
