The plan of reorganizing for Taylor Companies, Inc., was approved by the court, stockholders, and creditors on December 31, 20X1. The plan calls for a general restructuring of all of Taylors debt. The companys liability and capital accounts on December 31, 20X1, are as follows:

Accounts Payable (post petition)	$	30,800
Liabilities Subject to Compromise:
Accounts Payable		80,400
Notes Payable, 10%, unsecured		151,100
Interest Payable		37,600
Bonds Payable, 10%		200,000
Common Stock, $1 par		101,800
Additional Paid-In Capital		201,500
Retained Earnings (deficit)		(179,200	)
Total	$	624,000

A total of $30,800 of accounts payable has been incurred since the company filed its petition for relief under Chapter 11. No other liabilities have been incurred since the petition was filed. No payments have been made on the liabilities subject to the compromise that existed on the petition date. Under the terms of the reorganization plan:

1. The accounts payable creditors existing at the date the petition was filed agree to accept $72,360 of net accounts receivable in full settlement of their claims.
2. The holders of the 10 percent notes payable of $151,100 plus $17,600 of interest payable agree to accept land having a fair value of $126,924 and a book value of $86,200.
3. The holders of the 10 percent bonds payable of $200,000 plus $20,000 of interest payable agree to cancel accrued interest of $15,000, accept cash payment of the remaining $5,000 of interest, and accept a secured interest in the companys equipment in exchange for extending the term of the bonds for an additional year at no interest.
4. The common shareholders agree to reduce the deficit by changing the stocks par value to $2 per share and eliminating any remaining deficit after recognition of all gains or losses from the debt restructuring transactions specified in the plan of reorganization. The deficit will be eliminated by reducing additional paid-in capital

a. Prepare a recovery analysis for the plan of reorganization, concluding with the total recovery of each liability and capital component of Taylor Companies. (Amounts to be deducted should be indicated with minus sign.)

Answer is complete but not entirely correct.

TAYLOR COMPANIES, INC.
Plan of Reorganization
Recovery Analysis
December 31, 20X1
	Recovery
	Pre- Confirmation	Elimination of Debt and Equity	Surviving Debt	Reduction of Taylor's Assets	Common Stock		Total Recovery
					%	Value	$	%
Post-petition liabilities	$(30,800 correct		$(30,800) correct				$(30,800) correct	100 correct
Claims/Interest:
Accounts Payable	(80,400) correct	8,040 correct		(72,360) correct			(72,360) correct	90 correct
Notes Payable	(151,100) correct	30,220 WRONG		(126,924) correct			(126,924)correct	84 correct
Related Interest Payable	(17,600) correct	17,600 correct
Bonds Payable	(200,000) correct		(200,000)correct				(200,000)correct	100 correct
Related Interest Payable	(20,000) correct	15,000 correct		(5,000)correct			(5,000) correct	25 Correct
Total	(469,100)	70,860
Common shareholders:
Common Stock	(101,800) correct	(101,800) correct			100 correct	(203,600) correct	(203,600) correct
Additional Paid-In Capital	(201,500) correct	172,970 WRONG				(28,8300 WRONG	(28,830) WRONG
Retained Earnings Deficit	179,200 correct	(179,200) correct
Total	$(624,000)	$(37,170)	$(230,800)	$(204,284)	100	$(232,430)	$(667,514)	0

Answer is not complete.

No	Event	General Journal	Debit	Credit
A	1	Accounts payable correct	80,400 correct
		Notes payable correct	151,100 correct
		Interest payable correct	37,600 correct
		Cash correct		5,000 correct
		Accounts receivable (net) correct		72,360 Correct
		Gain on disposal of land correct		WRONG
		Gain on discharge of debt correct		WRONG
		Land		86200
B	2	Common stock ($1 par)selected answer correct	101,800 correct
		Additional paid-in capital correct	WRONG
		Gain on disposal of land correct	WRONG
		Gain on discharge of debt correct	WRONG
		Common stock ($2 par) correct		203,600 correct
		Retained earnings correct		WRONG