Borden Corporation is undergoing a Chapter 7 liquidation. Currently, it has cash of $130,000, inventory of...
Borden Corporation is undergoing a Chapter 7 liquidation. Currently, it has cash of $130,000, inventory of $650,000, and equipment of $775,000. It owes an unsecured bank loan payable of $500,000 and unsecured accounts payable of $1,600,000. During the current month, the Receiver sells Borden's entire inventory to a liquidator for $290,000. The entire cash balance is then distributed to unsecured creditors. The receiver's payment to the bank is
$500,000.
$420,000.
$100,000.
$290,000.
Homework Answers
Receiver payment to the bank is
$420000(290000+130000) as the entire cash balance is distributed to unsecured creditors so following are only two amounts in cash balance I.e.opening cash balance at the time of liquidation and inventory sold receipts
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Borden Corporation is undergoing a Chapter 7 liquidation.
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A company preparing for a Chapter 7 liquidation has listed the
following liabilities:
Note payable A of $102,000 secured by land having a book value
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Income taxes payable of $36,000.
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