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Tugas Advance Accounting: 1. Hanna Corporation

Hanna Corporation is insolvent and preparing a statement of affairs as of June 30, 2011. The statement shows realizable asset values of $37,000 are available to pay liabilities of $37,000, resulting in an estimated $10,800 deficiency for unsecured creditors. Unsecured creditors can expect to receive an estimated $0.60 for each $1 owed based on $22,200 being available to pay $37,000 of unsecured nonpriority claims. The partially secured note payable of $31,000 will recover $28,000 from the asset pledge and $1,800 of the unsecured portion.

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Lina Tanaga
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69 views3 pages

Tugas Advance Accounting: 1. Hanna Corporation

Hanna Corporation is insolvent and preparing a statement of affairs as of June 30, 2011. The statement shows realizable asset values of $37,000 are available to pay liabilities of $37,000, resulting in an estimated $10,800 deficiency for unsecured creditors. Unsecured creditors can expect to receive an estimated $0.60 for each $1 owed based on $22,200 being available to pay $37,000 of unsecured nonpriority claims. The partially secured note payable of $31,000 will recover $28,000 from the asset pledge and $1,800 of the unsecured portion.

Uploaded by

Lina Tanaga
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Lina Meilani Tanaga

PPA 46 / 24 Tugas Advance Accounting

1. HANNA CORPORATION
STATEMENT OF AFFAIRS
JUNE 30, 2011

ASSETS
Realizable
Values- Realizable
Liability Value
Offsets Available for
Book for Secured Unsecured
Value Creditors Creditors
Pledged for partially
secured creditors
$55,000 Equipment — net $28,000
Less: Mortgage note payable
and accrued interest (31,000) $ 0
Available for priority
and unsecured creditors
2,200 Cash 2,200
15,000 Accounts receivable — net 13,500
20,000 Inventories 22,500
Total available for priority and unsecured
creditors 38,200
Less: Priority liabilities 12,000
Total available for unsecured creditors 26,200
Estimated deficiency 10,800
$92,200 $37,000
LIABILITIES AND STOCKHOLDERS’
EQUITY
Book Secured and Unsecured Non-
Value Priority Claims priority Claims
Priority liabilities
$12,000 Wages payable (assumed under
$4,000 per employee) $12,000
Partially secured creditors
31,000 Note payable and accrued
interest $31,000
Less: Equipment pledged
as security (28,000) $ 3,000

Unsecured creditors
26,400 Accounts payable 26,400
7,600 Rent payable 7,600
Stockholders’ equity
55,000 Capital stock

(39,800) Retained earnings (deficit)


$92,200 $37,000
2 Estimated payments per dollar for unsecured creditors

Cash available $66,200


Less:
Note payable and interest $28,000
Administrative expenses 4,000
Wages payable 12,000 44,000

Unsecured nonpriority
claims (A)
$22,200

Note payable and interest (unsecured portion) $ 3,000


Accounts payable 26,400
Rent payable 7,600
Unsecured nonpriority claims (B) $37,000
𝐴 $22.200
= = $0,6 𝑝𝑒𝑟 𝑑𝑜𝑙𝑙𝑎𝑟
𝐵 37.000

Expected recovery for each class of claims


Partially secured
Note payable and interest
Secured portion $28,000
Unsecured portion ($3,000 $.60) 1,800 $29,800

Unsecured priority
Administrative expenses $ 4,000
Wages payable 12,000 16,000
Unsecured nonpriority
Accounts payable ($26,400 $.60) $15,840
Rent payable ($7,600 $.60) 4,560 20,400

Total payments $66,200

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