Mannheim Corporation is ready to emerge from Chapter 11 bankruptcy under a reorganization plan accepted...
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Accounting
Mannheim Corporation is ready to emerge from Chapter 11 bankruptcy under a reorganization plan accepted by all parties. Mannheim's balance sheet shows:
Various assets
$2,000,000
Prepetition liabilities, fully secured
$ 400,000
Prepetition liabilities subject to compromise
1,360,000
Postpetition liabilities
820,000
Shareholders' equity
(580,000)
TOTAL
$2,000,000
TOTAL
$2,000,000
New equity interests in the reorganized company are $160,000. The present value of future cash flows from the reorganized company's operating assets is $2,370,000. The compromised amount of Mannheim's prepetition liabilities is
$1,360,000.
$1,390,000.
$2,210,000.
$ 990,000.
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