Peter's Tools Recently Defaulted on a Bank Loan

question 60

Multiple Choice

Peter's Tools recently defaulted on a bank loan.To avoid a bankruptcy proceeding,the bank agreed to a composition.This composition would do which one of the following?

• A)Forgive the loan payment in its entirety
• B)Extend the due date on the missed loan payment
• C)Reduce the amount of the loan payments so Peter's can pay on time
• D)Transfer some of Peter's assets to the bank in lieu of the loan payment
• E)Transfer all the equity shares in Peter’s to the lending bank

Recognize the adjustments required to convert net income to net cash provided by operating activities.

Identify and calculate cash proceeds from the sale of assets and their reporting in investing activities.

Understand the impact of changes in working capital accounts on cash flows.

Determine cash flows related to the acquisition and disposition of fixed assets.

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Definitions:

Income Tax

A tax levied by governments on individuals or entities based on their income or profits.

Reward System

Programs and strategies to recognize and compensate employees for their performance and contribution to the organization.

Performance Measures

Metrics used to evaluate the efficiency, effectiveness, and performance of an organization's activities or employees.

Incentives

Rewards or benefits offered to encourage specific actions or behaviors, particularly in contexts of employment or economics.