Corporate Liquidation

Question 1

SOA or SORAL
- preliminary

Answer 1

SOA
- SORAL = periodic

Question 2

SOA or SORAL
- for planning

Answer 2

SOA
- SORAL = reporting

Question 3

SOA or SORAL
- amounts are actual

Answer 3

SORAL
- SOA = estimates

Question 4

Assets should be measured at carrying value. True or False?

Current and Noncurrent classification Asset & Liability → ignore

Answer 4

False (realizable value)

Question 5

Formula
- Net Free Assets
- TULWOP

Accrued interest → follow the principal (liab)

Answer 5

refer to notes

Question 6

Payment Distribution
- Fully Secured Liab
- Partially Secured

Answer 6

• 100%

Partially Secured
- Secured = 100%
- Unsecured = Recovery %

Question 7

Payment Distribution
- Unsecured with Priority
- Unsecured without Priority

Answer 7

• 100%
• Recovery %

Question 8

Assets Realized shall be measured at Book Value. True or False?

Answer 8

False (proceeds)

Question 9

Supplementary charges must exclude loss and writeoff.

Supplementary credits must exclude gain on realization.

Answer 9

Yes

Question 10

Formula for SORAL

Answer 10

refer to notes

Question 11

Formula
- Cash balance, Beg

What if cash balance, End?

Answer 11

Cash, Beg
‘+ Assets to be realized
‘- Liabilities to be liquidated
= Estate Equity, Beg