25. Mandich Co. had the following amounts for its assets, liabilities, and
stockholders’ equity accounts just before filing a bankruptcy petition and
requesting liquidation:
Of the salaries payable, $30,000 was owed to an officer of the company. The
remaining amount was owed to salaried employees who had not been paid within
the previous 80 days: John Webb was owed $10,600, Samantha Jones was owed
$15,000, Sandra Johnson was owed $11,900, and Dennis Roberts was owed
$2,500. The maximum owed for any one employee’s claims for contributions to
benefit plans was $800. Estimated expense for administering the liquidation
amounted to $40,000.
What amount would the company have expected to pay for every dollar of
unsecured liability without priority?
26. All of the following items are liabilities with priority
except
:
27. How are assets and liabilities valued on a Statement of Financial Affairs?
28. Assuming all of the following expenses have priority, in what order are
they prioritized?
29. Which of the following is
not
a responsibility of the bankruptcy trustee?
30. What information is conveyed by the Statement of Realization and
Liquidation?
31. Which statement is
false
regarding a plan for reorganization?
32. Which statement is
false
regarding the acceptance and confirmation of a
reorganization plan?
33. A company that was to be liquidated had the following liabilities:
Total assets, available to pay liabilities with priority and unsecured creditors, are
calculated to be what amount?
34. A company that was to be liquidated had the following liabilities:
Total liabilities with priority are calculated to be what amount?
35. A company that was to be liquidated had the following liabilities:
Assets available for unsecured creditors after payments of liabilities with priority
are calculated to be what amount?
36. A company that was to be liquidated had the following liabilities:
Total unsecured non-priority liabilities are calculated to be what amount?
37. For each of the following situations, select the best answer concerning the
classification of the
liability
.
(A.) Unsecured without priority
(B.) Unsecured with priority
(C.) Partially secured
(D.) Fully secured
___ 1. Payroll taxes payable.
___ 2. Land and building valued at $427,000 mortgaged by a bank loan in the
amount of $517,000.
___ 3. Equipment valued at $73,000 securing a loan to an individual in the
amount of $32,100.
___ 4. Salaries payable to employees in the following amounts: $1,250; $1,876;
$4,500.
___ 5. Electric bill owed to a local utility.
___ 6. Unpaid defined contribution pension plan payments in the amount of
$4,000 (none in excess of $375 per employee.)
___ 7. Obligations arising from the purchase of materials on July 5, 2011.
(Bankruptcy petition filed July 14, 2011).
___ 8. Fees charged by bankruptcy trustee.
___ 9. Inventory valued at $61,895 collateralizing a note payable to a bank in the
amount of $56,982.
___ 10. Delivery trucks valued at $389,900 securing a lien by General Motors for
$400,000.
38. What is meant by a “partially secured liability”?
39. What is meant by a “fully secured liability”?
40. What is the difference between a liquidation and a reorganization?
41. What are the three categories of assets in a Statement of Financial
Affairs?
42. What are the four categories of debts in a Statement of Financial Affairs?
43. What is the purpose of Chapter 7 of the
Bankruptcy Reform Act
?
44. What is the meaning of the phrase
debtor in possession
?
45. What are duties of the creditors committee in Chapter 7 liquidation?
46. What is an order for relief?
47. What occurs in the accounting records for fresh start accounting when a
bank agrees to accept less than the debtor’s book value of a note payable?
48. What term is used for a bankruptcy forced upon a debtor by its creditors?
49. To what does the term
Chapter 7 bankruptcy
refer?
50. To what does the term
Chapter 11 bankruptcy
refer?
51. What is the role of the trustee in the liquidation of a company?