On June 1, 20X5, the Books of Hallow Corporation Show

question 43

Essay

On June 1, 20X5, the books of Hallow Corporation show assets with book values and realizable values as follows:
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$\begin{array}{lrr}&\text { Assets }\\&&\text { Book Value }&\text { Realizable Value }\\\text { Cash } && \$ 10,000 & \$ 10,000 \\\text { Receivables (net) } && 100,000 & 50,000 \\\text { Inventory } & &140,000 & 100,000 \\\text { Land and building (net) } & &600,000 & 650,000 \\\text { Equipment (net) } && 400,000 & 100,000 \\\quad \text { Totals } && \$ 1,250,000 & \$ 910,000\end{array}$
Hallow's books show the following liabilities:
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$\begin{array}{lr}&\text { Liabilities }\\&&\text { Book Value }\\\text { Accounts payable } & &\$ 260,000 \\\text { Wages payable (eligible for priority) } && 10,000 \\\text { Taxes payable } && 20,000 \\\text { Accrued interest on notes payable } && 30,000 \\\text { Accrued interest on mortgage payable } & &20,000\\\text { Notes payable (secured by receivables and } & \\\text { inventory) } && 500,000 \\\text { Mortgage payable (secured by land and building) } && 300,000 \\\text { Total } && \$ 1,140,000 \\\end{array}$ Required:
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a.Prepare a schedule to determine the amount available for unsecured claims without priority.?
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b.Determine the dividend to unsecured claims without priority.?
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c.What amount are the note holders likely to receive? What is their dividend?
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