Answer to image 1
Free Assets | ||
Cash | 11,000.00 | |
Inventory | 61,000.00 | |
Equipment | 51,000.00 | |
Total Free Assets | 123,000.00 | |
Less: Liabilities With Priority | ||
Administrative Expenses | 21,000.00 | |
Income Tax Payable | 31,000.00 | |
Total Liabilities With Priority | -52,000.00 | |
Free Assets after Payment of Liabilities with Priority | 71,000.00 |
Unsecured Liabilities | |
In excess of Value of security | |
Notes Payable A ($92000 - 71,000) | 21,000.00 |
Notes Payable B ($122000 - 41,000) | 81,000.00 |
Uunsecured Creditors | |
Notes Payable C | 61,000.00 |
Accounts Payable | 121,000.00 |
Total Unsecured Liabilities | 284,000.00 |
Percentage of Unsecured Liabilities To Be Paid = $71,000 / 284,000 = 25% |
Amount Paid at the Time of Liquidation: | ||
Note Payable A = $71,000 + (21,000 X 25%) | = 76,250.00 | |
Note Payable B = $41,000 + (81,000 X 25%) | = 61,250.00 | |
Note Payable C = $61,000 X 25% | = 15,250.00 | |
Administrative Expenses | = 21,000.00 | |
Accounts Payable = $121,000 X 25% | = 30,250.00 | |
Income Tax Payable | = 31,000.00 |
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