Anteium Company owes $81,100 on a note payable that is currently due. The note is held...

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Anteium Company owes $81,100 on a note payable that is currentlydue. The note is held by a local bank and is secured by a mortgagelien attached to three acres of land worth $48,500. The landoriginally cost Anteium $31,500 when acquired several years ago.The only other account balances for this company are Investments of$22,600 (but worth $27,600), Accounts Payable of $22,200, CommonStock of $41,200, and a deficit of $89,400. Anteium is insolventand attempting to arrange a reorganization so that the business cancontinue to operate. The reorganization value of the company is$83,500.
View each of the following as an independent situation:
On a statement of financial affairs, how would this note bereported? How would the land be shown?
Assume that Anteium develops an acceptable reorganization plan.Sixty percent of the common stock is transferred to the bank tosettle that particular obligation. A 7 percent, three-year notepayable for $5,160 is used to settle the accounts payable. Howwould Anteium record the reorganization?
Assume that Anteium is liquidated. The land and investments aresold for $50,500 and $28,600, respectively. Administrative expensesamount to $13,400. How much will the various parties collect?

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4.1 Ratings (513 Votes)

1 The lands net realized value is less than the amount of the note payable the debt will be reported on a statement of financial affairs as a liability owed to partially secured creditors The 81100 obligation Is disclosed In this manner and then reduced by the 48500 anticipated cash proceeds The remaining 32600 balance will be shown by Anteium as an unsecured nonpriority liability 32600 The land is still reported as an asset one pledged with partially secured creditors The 31500 cost is See Answer

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