Answered: unsecured creditors with/without…

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Accounting

unsecured creditors with/without priority c. Estimated gain/loss on liquidation divided by total estimated

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter16: Statement Of Cash Flows

Section: Chapter Questions

Problem 13MC: Which of the following would be included in the financing section? A. loss on sale of investments B....

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Concept explainers

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.

Question

The estimated recovery percentage or dividend to unsecured creditors is calculated by which of the following formulas?

a. Estimated amount available for unsecured creditors with/without priority divided by total claims of all unsecured creditors with/without priority

b. Net free assets divided by the total claims of unsecured creditors with/without priority

c. Estimated gain/loss on liquidation divided by total estimated net realizable value of debtor assets

d. Net estimated proceeds available to general unsecured creditors divided by total claims of general unsecured creditors

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