Chapter 7 Liquidation
The carrying values and estimated fair values of the assets of Penn Inc. are as follows:
| Carrying Value | Fair Value |
Cash Accounts Receivable Inventory Land Building (net) Equipment (net) | $ 16,000 60,000 90,000 100,000 220,000 250,000 | $ 16,000 50,000 65,000 80,000 160,000 100,000 |
Total | $736,000 | $471,000 |
Debts of Penn Inc. are as follows:
Accounts Payable Wages Payable (all have priority) Taxes Payable Notes Payable (secured by receivables and inventory) Interest on Notes Payable Bonds Payable (secured by land and building) Interest on Bonds Payable | $ 95,000 9,500 14,000 190,000 5,000 220,000 11,000 |
Total | $544,500 |
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 $471,000 estimated to be realizable.
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