Wright Company Recently Petitioned for Bankruptcy and Is Now in the Process

question 15

Multiple Choice

Wright Company recently petitioned for bankruptcy and is now in the process of preparing a statement of affairs.The carrying values and estimated fair values of the assets of Wright Company are as follows:
Debts of Wright are as follows:

-Based on the preceding information,what estimated amount will be available for general unsecured creditors upon liquidation?

• A)$34,000
• B)$52,000
• C)$56,000
• D)$75,000

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, including loans, bonds, or lines of credit.

Net Income

The remaining profit of a company after all financial obligations and taxes are taken out of its total income.

Net New Equity

The amount of money raised by a company through the issuance of new shares, minus any shares repurchased.

Equity Repurchases

The process by which a company buys back its own shares from the marketplace, reducing the amount of outstanding stock.