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Multiple Choice Questions 1) When the bankruptcy court grants an order for relief under Chapter 7, A) creditors may not seek payment for their claims directly from the debtor corporation. B) the reorganization plan was accepted by creditors having at least one-half of the total number of claims and the claims represent at.
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12) The Justin, Kyle, and Lulu partnership was dissolved by the partners on May 1, 2011. Their balance sheet on that date is shown below: Cash$26,000Liabilities$41,000 Other assets96,000Loan from Kyle3,000 Loan to Justin10,000Justin,capital (20%)19,000 Kyle, capital (20%)26,000        Lulu, capital (60%)  43,000 Total assets$ 132,000Total liab./equity$ 132,000 In May, other assets with a book value of $46,000 were sold for $50,000.
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2) Dan and Ellie share partnership profits and losses at 70% and 30%, respectively. The partners agree to admit Fran into the partnership for a 50% interest in capital and earnings. Capital accounts immediately before the admission of Fran are: Dan (70%)$800,000 Ellie (30%)400,000 Total$              1,200,000 Required: 1.Prepare the journal entry(s) for the admission of.
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8) The Vera, Wade, and Xena partnership was dissolved, and a cash distribution plan was developed, as follows: Priority CreditorsVeraWadeXena First $462,000100% Next $173,00060%40% Next $240,0007/125/12 Remainder20%30%50% Required: If $1,000,000 of cash was distributed by the partnership, how much was received respectively by the priority creditors, Vera, Wade, and Xena? .
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6) The balance sheet of the Park, Quid, and Reggie partnership on November 1, 2011 (before commencement of partnership liquidation) was as follows: Cash$60,000Accounts payable$110,000 Accounts Receivable130,000Loan from Quid40,000 Loan to Park16,000Park, capital (20%)60,000 Loan to Reggie22,000Quid, capital (40%)52,000 Plant assets-net 120,000Reggie, capital (40%)   86,000 Total assets$ 348,000Total liab./equity$ 348,000 Liquidation events in November were as follows: - All receivables were settled.
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13) The partnership of May, Novem, and Octo was dissolved. By August 1, 2011, all assets had been converted into cash and all partnership liabilities were paid. The partnership balance sheet on August 1, 2011 (with partner residual profit and loss sharing percentages) was as follows: Cash$100,000May, capital (30%)$8,000 Novem, capital (20%)(120,000)        Octo,.
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8) Lesher Corporation lost their primary contract and entered into voluntary Chapter 7 bankruptcy in the early part of 2012. By July 1, all assets were converted into cash, the secured creditors were paid, and $124,500 in cash was left to pay the remaining claims as follows: Accounts payable$50,000 Claims incurred between.
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4) Ending Company is in bankruptcy and is being liquidated under the provisions of Chapter 7 of the bankruptcy code. The trustee has converted all assets into $80,000 cash (which includes the amounts shown below for assets sold) and has prepared the following list of approved claims: Property taxes payable$10,000 Accounts payable,.
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Exercises 1) Anna and Bess share partnership profits and losses at 60% and 40%, respectively. The partners agree to admit Cal into the partnership for a 50% interest in capital and earnings. Capital accounts immediately before the admission of Cal are: Anna (60%)$300,000 Bess (40%)300,000 Total$600,000 Required: 1. Prepare the journal entry(s) for the admission of.
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9) Required: 1.Prepare a schedule to allocate income to the partners assuming that partnership net income for 2011 is $330,000. 2.Prepare a journal entry to distribute the partnership's income to the partners (assume that an Income Summary account is used by the partnership). 10) Required: 1.Prepare a schedule to allocate income or loss to.
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6) The profit and loss sharing agreement for the Tuttle, Upman, and Veer partnership provides for residual profits and losses to be allocated 2:3:6 to Tuttle, Upman, and Veer, respectively. In 2011, the partnership recorded $11,000 of net income that was properly allocated to the partners' capital accounts. On January.
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18) Eve, Fig, Gus, and Hal are partners who share profits and losses 50%, 25%, 15%, and 10%, respectively. The partnership will be liquidated gradually over several months beginning January 1, 2011. The partnership trial balance at December 31, 2010 is as follows: DebitsCredits Cash$9,000 Accounts receivable26,000 Inventory78,000 Loan to Eve16,000 Furniture27,000 Equipment59,000 Goodwill10,000 Accounts payable$23,000 Note payable70,000 Loan from Hal7,000 Eve,.
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3) CommTex Corporation is liquidating under Chapter 7 of the Bankruptcy Act. The accounts of CommTex at the time of filing are summarized as follows: Estimated Realizable Book ValueValue Cash$80,000$80,000 Accounts receivable-net50,00040,000 Inventory80,00060,000 Land10,00020,000 Building-net150,000110,000 Equipment-net60,00040,000 Goodwill   10,0000 $ 440,000 Accounts payable$120,000 Wages and salaries20,000 Contributions due to pension plan10,000 Taxes payable60,000 Accrued interest payable (includes10,000 $8,000 from the mortgage payable and $2,000 from the note payable) Note payable120,000 Mortgage payable90,000 Capital stock80,000 Deficit (70,000) $ 440,000 The.
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11) Using a safe payments schedule, how much cash should Melvin receive in the first distribution? A) $ 81,000 B) $165,000 C) $168,600 D) $202,500 12) Using a safe payment schedule, how much cash should Lola receive in the first distribution? A) $ 81,000 B) $ 98,000 C) $168,600 D) $202,500 13) Que, Rae, and Sye are in the process.
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9) Moddle Corporation is being liquidated under Chapter 7 of the Bankruptcy Act. The trustee has determined that the unsecured claims will receive $.20 on the dollar. National Corporation holds a $500,000 mortgage note receivable from Moddle that is secured by equipment with a $550,000 book value and a $430,000.
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14) A summary balance sheet for the partnership of Maddy, Nelson and Olsen on December 31, 2011 is shown below. Partners Maddy, Nelson and Olsen allocate profit and loss in their respective ratios of 9:6:10. Assets Cash$ 50,000 Marketable securities120,000 Inventory75,000 Land80,000 Building-net400,000 Total assets$725,000 Equities Maddy, capital$425,000 Nelson, capital225,000 Olsen, capital75,000 Total equities$725,000 The partners agree to admit Poosh for a one-tenth.
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2) Alitech Corporation is liquidating under Chapter 7 of the Bankruptcy Act. The accounts of Alitech at the time of filing are summarized as follows: Estimated Realizable Book ValueValue Cash$10,000$10,000 Accounts receivable-net60,00050,000 Inventory110,00065,000 Land20,00035,000 Building200,000126,000 Goodwill  22,000 $ 422,000 Accounts payable$120,000 Wages and salaries30,000 Taxes payable80,000 Accrued mortgage interest payable22,000 Mortgage payable100,000 Capital stock90,000 Deficit (20,000) $ 422,000 The land and building are pledged as security for the mortgage payable as well as.
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5) The balance sheet of the Maude, Ned, and Oscar partnership on November 1, 2011 (before commencement of partnership liquidation) was as follows: Cash$12,000Georgia, capital (40%)$36,000 Holly, capital (30%)6,000      Festus, capital (50%) 31,000 Total assets$90,000Total liab./equity$90,000 Cash$70,000Accounts payable$42,000 Inventory60,000Notes payable68,000 Loan to Maude10,000Maude, capital(20%)30,000 Loan to Oscar18,000Ned, capital(20%)32,000 Plant assets-net80,000Oscar, capital(60%)66,000                Total assets$ 238,000Total liab./equity$ 238,000 Liquidation events in November were as follows: - All.
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Exercises 1) The balance sheet of the Addy, Bess, and Clara partnership on January 1, 2011 (the date of partnership dissolution) was as follows: Cash$4,000Liabilities$8,000 Other assets26,000Loan from Addy1,000 Loan to Clara2,000Addy, capital (20%)2,000 Bess, capital (40%)9,000      Clara, capital (40%) 12,000 Total assets$32,000Total liab./equity$32,000 In January, other assets with a book value of $16,000 were sold for $10,000 in.
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15) Tye, Ula, Val, and Watt are partners who share profits and losses 40%, 30%, 20%, and 10%, respectively. The partnership will be liquidated gradually over several months beginning January 1, 2011. The partnership trial balance at December 31, 2010 is as follows: DebitsCredits Cash$3,000 Accounts receivable19,000 Inventory25,000 Loan to Val5,000 Furniture15,000 Equipment10,000 Goodwill12,000 Accounts payable$13,600 Note payable30,000 Loan from Tye5,000 Tye,.
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12) Greta, Harriet, and Ivy have a retail partnership business selling personal computers. The partners are allowed an interest allocation of 6% on their average capital. Capital account balances on the first day of each month are used in determining weighted average capital, regardless of additional partner investment or withdrawal.
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10) The Catt, Dogg, and Eustus partnership was dissolved by the partners in early 2011. On March 1, the partners prepared the following financial statement before commencement of final liquidation: Cash$80,000Accounts payable$125,000 Accounts Receivable160,000Notes payable70,000 Inventory130,000Loan from Dogg5,000 Loan to Catt10,000Catt, capital (20%)130,000 Loan to Eustus15,000Dogg, capital (20%)95,000 Plant assets-net 210,000Eustus, capital(60%)  180,000 Total assets$ 605,000Total liab./equity$ 605,000 Liquidation events in March.
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11) Creditor committees are elected A) in all bankruptcy cases. B) in Chapter 7 cases. C) only in bankruptcy cases arising from involuntary petitions. D) in Chapter 11 cases. 12) In a Chapter 7 bankruptcy case, what is the first-to-last ranking order of priority for payment? (Use the following list of claim types.) I.stockholder claims II.unsecured priority.
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3) The partnership of Georgia, Holly, and Izzy was dissolved, and by July 1, 2011, all assets had been converted into cash and all partnership liabilities were paid. The partnership balance sheet on July 1, 2011 (with partner residual profit and loss sharing percentages) was as follows: Cash$10,000Georgia, capital (40%)$              (20,000) Holly,.
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20) The partners of the Minion, Nocti and Overly partnership share profits and losses in the ratio of 6:3:1, respectively. The partners have decided to liquidate and terminate the partnership. Prior to liquidation, the partnership balance sheet was as follows: Cash$20,000Liabilities$120,000 Inventory100,000Minion, capital60,000 Fixed assets - net160,000Nocti, capital80,000        Overly, capital  20,000 Total assets$ 280,000Total equity$ 280,000 Required: Prepare a schedule.
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Exercises 1) Rank the following claims of an organization filing Chapter 7 bankruptcy from 1 to 4 based on the following classifications. Each classification may be used more than once. 1.Secured Claims 2.Unsecured Priority Claims 3.Unsecured Nonpriority Claims 4.Stockholders' Claims _____ A. Claims for wages that are less than $10,000 per individual, earned within 90 days.
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12) Dip Corporation is in a Chapter 11 bankruptcy reorganization. For each of the following transactions relating to the reorganization, show the journal entry that would be required by Dip. Assume that all unsecured liabilities were not reclassified to Prepetition Claims Subject to Compromise. 1.Dip has $200,000 in bonds payable which.
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20) The Leo, Mark and Natalie Partnership had the following capital balances and profit/loss sharing percentages: BalanceSharing % Leo$200,00050% Mark$160,00040% Natalie$140,00010% Newsome is going to buy into the partnership by paying $200,000 for a 20% ownership in the partnership. Required: 1.If Newsome pays the partnership directly, what are the four partner capital balances immediately following Newsome's admission.
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9) The balance sheet of the Ama, Bade, and Calli partnership on May 1, 2011 (before commencement of partnership liquidation) was as follows: Cash$108,000Accounts payable$56,000 Inventory120,000Notes payable120,000 Loan to Ama20,000Ama, capital (30%)64,000 Loan to Calli32,000Bade, capital (50%)180,000 Plant assets-net  220,000Calli, capital (20%)  80,000 Total assets$ 500,000Total liab./equity$ 500,000 Liquidation events in May were as follows: - The inventory was sold for $12,000.
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Multiple Choice Questions 1) Which statement is correct in describing the rank order of payments as specified by the Uniform Partnership Act? A) Payments to partners are ranked equally, regardless of underlying basis. B) Payment to partners with excess capital balances may be placed ahead of payments to creditors. C) Payments to creditors other.
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5) Finale Company is in bankruptcy and is being liquidated under the provisions of Chapter 7 of the bankruptcy code. The trustee has converted all assets into $180,000 cash and has prepared the following list of approved claims: Customer deposits ($1,000 from each of three customers that ordered products that were never.
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15) A summary balance sheet for the partnership of Quail, Rainne and Selma on December 31, 2011 is shown below. Partners Quail, Rainne and Selma allocate profit and loss in their respective ratios of 6:3:1. Assets Cash$ 320,000 Marketable securities640,000 Inventory270,000 Land130,000 Building-net210,000 Total assets$1,570,000 Equities Quail, capital$ 670,000 Rainne, capital580,000 Selma, capital320,000 Total equities$1,570,000 The partners agree to admit Trask for a.
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7) A cash distribution plan for the Sammi, Tammy, and Udd partnership was as follows: Priority CreditorsSammiTammyUdd First $250,000100% Next $100,00070%30% Next $150,00011/154/15 Remainder20%35%45% Required: If $850,000 of cash was distributed by the partnership, how much was received respectively by the priority creditors, Sammi, Tammy, and Udd? .
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17) Alf, Bill, Cam, and Dot are partners who share profits and losses 30%, 20%, 35%, and 15%, respectively. The partnership will be liquidated gradually over several months beginning January 1, 2011. The partnership trial balance at December 31, 2010 is as follows: DebitsCredits Cash$6,000 Accounts receivable20,000 Inventory50,000 Loan to Bill8,000 Furniture30,000 Equipment36,000 Goodwill20,000 Accounts payable$23,500 Note payable60,000 Loan from Cam12,400 Alf,.
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11) Daniel, Ethan, and Frank have a retail partnership business selling personal computers. The partners are allowed an interest allocation of 8% on their average capital. Capital account balances on the first day of each month are used in determining weighted average capital, regardless of additional partner investment or withdrawal.
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11) The balance sheet of the Flail, Gail, and Hale partnership on October 1, 2011 (the date of partnership dissolution) was as follows: Cash$3,000Liabilities$9,000 Other assets33,000Loan from Flail1,000 Loan to Gail4,000Flail,capital (20%)3,000 Gail, capital (30%)6,000        Hale, capital (50%)   21,000 Total assets$  40,000Total liab./equity$  40,000 In October, other assets with a book value of $15,000 were sold for $17,000 in cash. Required: Determine.
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16) The partners of Nelatyna Manufacturing have decided to dissolve their partnership as of the end of 2010. The partnership is going to liquidate during the first several months of 2011. The four partners of Nell, Ann, Tyler and Nadine, share profits and losses 35%, 30%, 25%, and 10%, respectively..
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2) The partnership of Dolla, Earl, and Festus was dissolved on January 1, 2011. The balance sheet at that date is shown below: Cash$12,000Liabilities$36,000 Other assets70,000Loan from Dolla1,000 Loan to Clara8,000Dolla, capital (20%)6,000 Earl, capital (30%)16,000      Festus, capital (50%) 31,000 Total assets$90,000Total liab./equity$90,000 In January, $34,000 of the accounts receivable was collected, and an additional $6,000 was determined.
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19) A cash distribution plan for the Jonah, Krispy, and Lemon partnership was as follows: Priority CreditorsJonahKrispyLemon First $100,000100% Next $180,00044%10%46% Next $270,0002/91/92/3 Remainder11%44%45% Required: If $700,000 of cash was distributed by the partnership, how much was received respectively by the priority creditors, Jonah, Krispy, and Lemon? .
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7) Required: 1.Prepare a schedule to allocate income to the partners assuming that partnership net income for 2011 is $250,000. 2.Prepare a journal entry to distribute the partnership's income to the partners (assume that an Income Summary account is used by the partnership). 8) Required: 1.Prepare a schedule to allocate income or loss to.
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