Bankruptcy – NBC Institute

CR – Nov 2017 – L3 – Q6 – Impairment of Assets (IAS 36)

Provide advice on provisions and disclosures for Eko Exports Limited’s financial statements based on events in 2016.

Question

The following information pertains to Eko Exports Limited (EEL) for the financial year ended December 31, 2016:

A customer who owed ₦1 million was declared bankrupt after his warehouse was destroyed by fire on February 10, 2017. It is expected that the customer would be able to recover 50% of the loss from the insurance company.
An employee of EEL forged the signatures of directors and made cash withdrawals of ₦7.5 million from the bank. Of these, ₦1.5 million were withdrawn before December 31, 2016. Investigations revealed that an employee of the bank was also involved, and under a settlement arrangement, the bank paid 60% of the amount to EEL on January 27, 2017.
EEL has filed a claim against one of its vendors for supplying defective goods. EEL’s legal consultant is confident that damages of ₦1 million would be paid to EEL. The supplier has already reimbursed the actual cost of the defective goods.
A suit for infringement of patents, seeking damages of ₦2 million, was filed by a third party. EEL’s legal consultant is of the opinion that an unfavorable outcome is most likely. Based on past experience, he has advised that there is a 60% probability that the amount of damages would be ₦1 million and a 40% likelihood that the amount would be ₦1.5 million.

Required:
Advise EEL about the amount of provision that should be incorporated and the disclosures that are required to be made in the financial statements for the year ended December 31, 2016.
Total: 15 Marks

Answer

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Tags: Bankruptcy, Contingent Liabilities, Forgery, Legal claims, Provisions
Level: Level 3

Topic: Impairment of Assets (IAS 36)
Series: NOV 2017

BL – Nov 2020 – L1 – SB – Q2c – Company Law

Differentiate insolvency from bankruptcy and outline consequences of insolvency.

Question

Insolvency occurs when a company is unable to pay its debts.

Required:
i. Distinguish insolvency from bankruptcy.
ii. Explain briefly the consequences of insolvency on a company.

Answer

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Tags: Bankruptcy, Corporate Consequences, Financial Distress, Insolvency
Level: Level 1

Topic: Company Law
Series: NOV 2020

BL – May 2012 – L1 – SB – Q2C – Company Law

State two powers of an Official Receiver appointed to manage a debtor's property.

Question

An Official Receiver is usually appointed by the court to take over the management of the property of a debtor. You are required to state TWO powers of an Official Receiver.

Answer

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Tags: Bankruptcy, Business Law, Official Receiver
Level: Level 1

Topic: Company Law
Series: MAY 2012

BL – May 2012 – L1 – SA – Q20 – Law Relating to Banking

Identify the legal term for the state taking possession of a debtor's property.

Question

The proceedings whereby the State takes over the possession of the property of a debtor and distributes them among persons whom the debtor owes money is known as:

A. Bankruptcy
B. Matrimonial causes proceedings
C. Lifting the veil proceedings
D. Garnishee proceedings
E. Binding over proceedings

Answer

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Tags: Bankruptcy, Business Law, Proceedings
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2012

BL – May 2012 – L1 – SA – Q8 – Partnership Law

Identify the activity that an un-discharged bankrupt cannot engage in.

Question

In which of the following shall an un-discharged bankrupt NOT engage?

A. Travel outside the country
B. Attend shareholders’ meeting of a company
C. Enjoy public amenities
D. Contest in an election for an elective office
E. Contribute to a public debate

Answer

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Tags: Bankruptcy, Business Law, Restrictions
Level: Level 1

Topic: Partnership Law
Series: MAY 2012

BL – Nov 2011 – L1 – SB – Q2d – Partnership Law

Understanding the concept of deferred debts in bankruptcy and providing examples.

Question

Define “Deferred Debts” in bankruptcy proceedings and give any THREE examples.

Answer

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Tags: Bankruptcy, Debt Hierarchy, Deferred Debts
Level: Level 1

Topic: Partnership Law
Series: NOV 2011

BL – Nov 2011 – L1 – SA – Q16 – Law of Trusts

Identifying the legal process where a debtor assigns assets to a trustee to avoid bankruptcy.

Question

In order to avoid being declared bankrupt, a debtor may assign substantially all his assets to a trustee by executing what is known as ………………………………

Answer

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Tags: Assignment of Assets, Bankruptcy, Trustee
Level: Level 1

Topic: Law of Trusts
Series: NOV 2011

BL – Nov 2011 – L1 – SA – Q15 – Agency Law

Identifying the person responsible for getting in and distributing the assets of a bankrupt individual.

Question

Who is usually appointed for the purpose of getting in and distributing the assets of a bankrupt?

Answer

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Tags: Assets, Bankruptcy, Trustee
Level: Level 1

Topic: Agency Law
Series: NOV 2011

BL – Nov 2012 – L1 – SA – Q19 – Contract Law

Identify the legal activity that an undischarged bankrupt is not incapacitated from doing.

Question

An undischarged bankrupt is NOT legally incapacitated to do ONE of the following:

A. To marry a wife
B. To be elected into an elective office
C. To be appointed to or to act in the office of a Justice of Peace
D. To be appointed as a trustee of a trust estate
E. To be admitted to serve on a governing board of a statutory institution

Answer

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Tags: Bankruptcy, Legal Incapacities
Level: Level 1

Topic: Contract Law
Series: NOV 2012

BL – May 2013 – L1 – SB – Q6A – Law Relating to Banking

State three reasons a creditor may present a bankruptcy petition against a debtor.

Question

Explain THREE reasons for which a creditor shall be entitled to present a bankruptcy petition against a debtor.

Answer

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Tags: Bankruptcy, Creditor’s Petition, Liquidated Debt
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2013

CR – Nov 2017 – L3 – Q6 – Impairment of Assets (IAS 36)

Provide advice on provisions and disclosures for Eko Exports Limited’s financial statements based on events in 2016.

Question

The following information pertains to Eko Exports Limited (EEL) for the financial year ended December 31, 2016:

A customer who owed ₦1 million was declared bankrupt after his warehouse was destroyed by fire on February 10, 2017. It is expected that the customer would be able to recover 50% of the loss from the insurance company.
An employee of EEL forged the signatures of directors and made cash withdrawals of ₦7.5 million from the bank. Of these, ₦1.5 million were withdrawn before December 31, 2016. Investigations revealed that an employee of the bank was also involved, and under a settlement arrangement, the bank paid 60% of the amount to EEL on January 27, 2017.
EEL has filed a claim against one of its vendors for supplying defective goods. EEL’s legal consultant is confident that damages of ₦1 million would be paid to EEL. The supplier has already reimbursed the actual cost of the defective goods.
A suit for infringement of patents, seeking damages of ₦2 million, was filed by a third party. EEL’s legal consultant is of the opinion that an unfavorable outcome is most likely. Based on past experience, he has advised that there is a 60% probability that the amount of damages would be ₦1 million and a 40% likelihood that the amount would be ₦1.5 million.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Bankruptcy, Contingent Liabilities, Forgery, Legal claims, Provisions
Level: Level 3

Topic: Impairment of Assets (IAS 36)
Series: NOV 2017

BL – Nov 2020 – L1 – SB – Q2c – Company Law

Differentiate insolvency from bankruptcy and outline consequences of insolvency.

Question

Insolvency occurs when a company is unable to pay its debts.

Required:
i. Distinguish insolvency from bankruptcy.
ii. Explain briefly the consequences of insolvency on a company.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Bankruptcy, Corporate Consequences, Financial Distress, Insolvency
Level: Level 1

Topic: Company Law
Series: NOV 2020

BL – May 2012 – L1 – SB – Q2C – Company Law

State two powers of an Official Receiver appointed to manage a debtor's property.

Question

An Official Receiver is usually appointed by the court to take over the management of the property of a debtor. You are required to state TWO powers of an Official Receiver.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Bankruptcy, Business Law, Official Receiver
Level: Level 1

Topic: Company Law
Series: MAY 2012

BL – May 2012 – L1 – SA – Q20 – Law Relating to Banking

Identify the legal term for the state taking possession of a debtor's property.

Question

The proceedings whereby the State takes over the possession of the property of a debtor and distributes them among persons whom the debtor owes money is known as:

A. Bankruptcy
B. Matrimonial causes proceedings
C. Lifting the veil proceedings
D. Garnishee proceedings
E. Binding over proceedings

Answer

Find Related Questions by Tags, levels, etc.

Tags: Bankruptcy, Business Law, Proceedings
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2012

BL – May 2012 – L1 – SA – Q8 – Partnership Law

Identify the activity that an un-discharged bankrupt cannot engage in.

Question

In which of the following shall an un-discharged bankrupt NOT engage?

A. Travel outside the country
B. Attend shareholders’ meeting of a company
C. Enjoy public amenities
D. Contest in an election for an elective office
E. Contribute to a public debate

Answer

Find Related Questions by Tags, levels, etc.

Tags: Bankruptcy, Business Law, Restrictions
Level: Level 1

Topic: Partnership Law
Series: MAY 2012

BL – Nov 2011 – L1 – SB – Q2d – Partnership Law

Understanding the concept of deferred debts in bankruptcy and providing examples.

Question

Define “Deferred Debts” in bankruptcy proceedings and give any THREE examples.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Bankruptcy, Debt Hierarchy, Deferred Debts
Level: Level 1

Topic: Partnership Law
Series: NOV 2011

BL – Nov 2011 – L1 – SA – Q16 – Law of Trusts

Identifying the legal process where a debtor assigns assets to a trustee to avoid bankruptcy.

Question

In order to avoid being declared bankrupt, a debtor may assign substantially all his assets to a trustee by executing what is known as ………………………………

Answer

Find Related Questions by Tags, levels, etc.

Tags: Assignment of Assets, Bankruptcy, Trustee
Level: Level 1

Topic: Law of Trusts
Series: NOV 2011

BL – Nov 2011 – L1 – SA – Q15 – Agency Law

Identifying the person responsible for getting in and distributing the assets of a bankrupt individual.

Question

Who is usually appointed for the purpose of getting in and distributing the assets of a bankrupt?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Assets, Bankruptcy, Trustee
Level: Level 1

Topic: Agency Law
Series: NOV 2011

BL – Nov 2012 – L1 – SA – Q19 – Contract Law

Identify the legal activity that an undischarged bankrupt is not incapacitated from doing.

Question

An undischarged bankrupt is NOT legally incapacitated to do ONE of the following:

Answer

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Tags: Bankruptcy, Legal Incapacities
Level: Level 1

Topic: Contract Law
Series: NOV 2012

BL – May 2013 – L1 – SB – Q6A – Law Relating to Banking

State three reasons a creditor may present a bankruptcy petition against a debtor.

Question

Explain THREE reasons for which a creditor shall be entitled to present a bankruptcy petition against a debtor.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Bankruptcy, Creditor’s Petition, Liquidated Debt
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2013

Question Tag: Bankruptcy

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CR – Nov 2017 – L3 – Q6 – Impairment of Assets (IAS 36)

Provide advice on provisions and disclosures for Eko Exports Limited’s financial statements based on events in 2016.

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BL – Nov 2020 – L1 – SB – Q2c – Company Law

Differentiate insolvency from bankruptcy and outline consequences of insolvency.

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BL – May 2012 – L1 – SB – Q2C – Company Law

State two powers of an Official Receiver appointed to manage a debtor's property.

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BL – May 2012 – L1 – SA – Q20 – Law Relating to Banking

Identify the legal term for the state taking possession of a debtor's property.

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BL – May 2012 – L1 – SA – Q8 – Partnership Law

Identify the activity that an un-discharged bankrupt cannot engage in.

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BL – Nov 2011 – L1 – SB – Q2d – Partnership Law

Understanding the concept of deferred debts in bankruptcy and providing examples.

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BL – Nov 2011 – L1 – SA – Q16 – Law of Trusts

Identifying the legal process where a debtor assigns assets to a trustee to avoid bankruptcy.

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BL – Nov 2011 – L1 – SA – Q15 – Agency Law

Identifying the person responsible for getting in and distributing the assets of a bankrupt individual.

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BL – Nov 2012 – L1 – SA – Q19 – Contract Law

Identify the legal activity that an undischarged bankrupt is not incapacitated from doing.

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BL – May 2013 – L1 – SB – Q6A – Law Relating to Banking

State three reasons a creditor may present a bankruptcy petition against a debtor.

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CR – Nov 2017 – L3 – Q6 – Impairment of Assets (IAS 36)

Provide advice on provisions and disclosures for Eko Exports Limited’s financial statements based on events in 2016.

You're reporting an error for "CR – Nov 2017 – L3 – Q6 – Impairment of Assets (IAS 36)"

BL – Nov 2020 – L1 – SB – Q2c – Company Law

Differentiate insolvency from bankruptcy and outline consequences of insolvency.

You're reporting an error for "BL – Nov 2020 – L1 – SB – Q2c – Company Law"

BL – May 2012 – L1 – SB – Q2C – Company Law

State two powers of an Official Receiver appointed to manage a debtor's property.

You're reporting an error for "BL – May 2012 – L1 – SB – Q2C – Company Law"

BL – May 2012 – L1 – SA – Q20 – Law Relating to Banking

Identify the legal term for the state taking possession of a debtor's property.

You're reporting an error for "BL – May 2012 – L1 – SA – Q20 – Law Relating to Banking"

BL – May 2012 – L1 – SA – Q8 – Partnership Law

Identify the activity that an un-discharged bankrupt cannot engage in.

You're reporting an error for "BL – May 2012 – L1 – SA – Q8 – Partnership Law"

BL – Nov 2011 – L1 – SB – Q2d – Partnership Law

Understanding the concept of deferred debts in bankruptcy and providing examples.

You're reporting an error for "BL – Nov 2011 – L1 – SB – Q2d – Partnership Law"

BL – Nov 2011 – L1 – SA – Q16 – Law of Trusts

Identifying the legal process where a debtor assigns assets to a trustee to avoid bankruptcy.

You're reporting an error for "BL – Nov 2011 – L1 – SA – Q16 – Law of Trusts"

BL – Nov 2011 – L1 – SA – Q15 – Agency Law

Identifying the person responsible for getting in and distributing the assets of a bankrupt individual.

You're reporting an error for "BL – Nov 2011 – L1 – SA – Q15 – Agency Law"

BL – Nov 2012 – L1 – SA – Q19 – Contract Law

Identify the legal activity that an undischarged bankrupt is not incapacitated from doing.

You're reporting an error for "BL – Nov 2012 – L1 – SA – Q19 – Contract Law"

BL – May 2013 – L1 – SB – Q6A – Law Relating to Banking

State three reasons a creditor may present a bankruptcy petition against a debtor.

You're reporting an error for "BL – May 2013 – L1 – SB – Q6A – Law Relating to Banking"

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