Aqua Corporation Filed a Petition Under Chapter 7 of the Bankruptcy

question 2

Short Answer

Aqua Corporation filed a petition under Chapter 7 of the bankruptcy act in January,2014.On February 28,the following information was presented regarding Aqua's financial status.
$\begin{array}{llll}&\text { Book Values}&\text { Fair Values }\\\text { Cash } & \$ 50,000 \$ & 50,000 \\\text { A/R - net } & 100,000 & 90,000 \\\text { Inventories } & 80,000 & 60,000 \\\text { Fixed Assets - net } & 200,000 & 230,00\end{array}$ $$\begin{array} { l l } \text { Prionty Clains } & 80,000 \\\text { A/P } & 100,000 \\\text { N/P } & 110,000 \\\text { Mortgage Payable } & 200,000\end{array}$$ The Note Payable is secured by Accounts Receivable,and the Mortgage Payable is secured by the Fixed Assets.
Required:
Calculate the amount expected to be available for unsecured claims and the percentage recovery that the unsecured class should expect to receive.

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Definitions:

Operating Activities

Activities that relate to the primary operations of a company, such as sales, provision of services, and production.

Indirect Method

This approach is used in cash flow statements to report net income and adjust it for changes in assets and liabilities that affect cash but are not cash transactions themselves.

Depreciated Equipment

Assets that have undergone depreciation to reflect the reduction in value due to wear and tear, age, or obsolescence.

Statement of Cash Flows

An accounting statement detailing collective cash receipts from operational businesses and external investments, plus cash expenses for business and investment activities over a designated period.