ABC Co. is undergoing liquidation. The following are the account balances after all the non-cashassets were sold:50,000 LiabilitiesA, Capital (30%)B, Capital (30%)C, Capital (40%)Cash120,00090,000(60,000)(100,000)The personal assets and liabilities of the partners are as follows:Personal assets80,000100,000192,000Personal liabilities90,00061,00080,000ABC wants to make an additional contribution of only P70,000, which A is refuting. If the doctrine ofmarshaling of assets is followed, how much of A's P90,000 equity would appear to be recoverable?a. 90,000b. 79,000c. 81,000d. 0

Doctrine of Marshalling of Assets:- A creditor who makes this doctrine principle , or we can say,…

ABC Co. is undergoing liquidation. The following are the account balances after all the non-cash assets were sold: Cash 50,000 Liabilities 120,000 90,000 A, Capital (30%) B, Capital (30%) (60,000) (100,000) C, Capital (40%) The personal assets and liabilities of the partners are as follows: Personal assets Personal liabilities A 80,000 90,000 B 100,000 61,000 80,000 с 192,000 C wants to make an additional contribution of only $70,000, which A is refuting. If the doctrine of marshaling of assets is followed, how much of A's P90,000 equity would appear to be recoverable?

ABC Co. is undergoing liquidation. The following are the account balances after all the non-cash assets were sold: Cash 50,000 Liabilities 120,000 90,000 A, Capital (30%) B, Capital (30%) (60,000) (100,000) C, Capital (40%) The personal assets and liabilities of the partners are as follows: Personal assets Personal liabilities A 80,000 90,000 B 100,000 61,000 80,000 с 192,000 C wants to make an additional contribution of only $70,000, which A is refuting. If the doctrine of marshaling of assets is followed, how much of A's P90,000 equity would appear to be recoverable?

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter24: Bankruptcy, Reorganization, And Liquidation

Section: Chapter Questions

Problem 1P: Southwestern Wear Inc. has the following balance sheet: The trustees costs total 281,250, and the...

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Southwestern Wear Inc. has the following balance sheet: The trustees costs total 281,250, and the firm has no accrued taxes or wages. The debentures are subordinated only to the notes payable. If the firm goes bankrupt and liquidates, how much will each class of investors receive if a total of 2.5 million is received from sale of the assets?
The statement of financial position of the firm AA, BB and CC immediately before liquidation shows the following: Assets 640,000 Liabilities 240,000 AA, Loan 64,000 AA, Capital 168,000 BB, Capital 120,000 CC, Capital 48,000 Total 640,000 AA, BB and CC share profits 5:3:2 respectively. Certain assets are sold for P440,000. Creditors are paid in full, partners are paid P140,000 and cash of P60,000 is withheld for contingencies. How much cash is to be distributed to AA?
The statement of Financial Position of Highschool Kids, just before liquidation is as follows: Assets Liabilities & Capital Cash 50,000 Liabilities 70,000 Other assets 140,000 Loan, Young 20,000 Loans to Broke 10,000 Young, capital (50%) 30,000 Dumb, capital (30%) 50,000 Broke, capital (20%) 30,000 Total 200,000 Total 200,000 The partners Young and Dumb are personally insolvent. If non cash assets are sold for P150,000 and all liabilities are paid and liquidation expense of P5,000 are also paid, how much cash should Young, Dumb and Broke receive? Young Dumb Broke A. 32,500 51,500 31,000 B. 55,000 53,000 22,000 C. 52,500 51,500 21,000 D. 47,500 48,500 19,000
The balance sheet accounts of partners Pacman, Marquez and Mayweather before liquidation are the following: Cash, P360,000; Non-Cash Assets, P1,785,000; Liabilities, P1,000,000; Pacman, Capital (50%), P460,000; Marquez, Capital (30%), P365,000 and Mayweather, Capital (20%), P320,000. On the first month of liquidation, certain assets with a book value of P1,200,000 are sold for P960,000. Liquidation expenses of P30,000 are paid and additional expenses are anticipated. Liabilities are paid amounting to P362,000, and sufficient cash is retained to insure the payment to creditors before making payment to partners. In the first payment of cash to partners, Marquez received P107,000.
ABC Corporation currently has $20,000 in cash, $30,000 in noncash assets, and liabilities of $35,000. The partners, Adrian, Batch, and Crenshaw, had capital balances of $5,000, $8,000, and $2,000, respectively. The partners share a profit and loss ratio of 1:1:3. The noncash assets were sold for $60,000. Complete the liquidation chart below.
Slick, Tony and Sam partnership began the process of liquidation with the following account balances: Cash 16,000 Non-cash assets 434,000 Liabilities 150,000 Slick, Capital (30%) 80,000 Tony, Capital (20%) 90,000 Sam, Capital (50%) 130,000 Liquidation expenses are expected to be P12,000. After the liquidation expenses of P12,000 had been paid and the non-cash assets sold, Sam had a deficit of P8,000. Assuming all partners are personally insolvent, how much is the final settlement to Tony? P24,000 P34,800 P36,000 P37,200
Partners Nina, Ricci, and Guess, who share profit and losses in the ratio of 2:2:1, respectively, decided to liquidate. The condensed statement of financial position account balances just prior to the liquidation are: Cash-P 100,000; Other assets-P 400,000; Liabilities - P 140.000: Nina, Loan-P 10,000; Nina, Capital-P45,000: Ricci, Capital -P 105.000; Guess, Capital - P200,000. After paying the llabilities to partnership creditors, cash of P207,500 is available for distribution to partners. Any capital deficiency is made good by the deficient partner, since all three partners are personally solvent. how much would Nina receive in the final settlement of his interest? how much would Guess receive in the final settlement of his interest?
Partners Nina, Ricci, and Guess, who share profit and losses in the ratio of 2:2:1, respectively, decided to liquidate. The condensed statement of financial position account balances just prior to the liquidation are: Cash-P 100,000; Other assets-P 400,000; Liabilities - P 140.000: Nina, Loan-P 10,000; Nina, Capital-P45,000: Ricci, Capital -P 105.000; Guess, Capital - P200,000. After paying the llabilities to partnership creditors, cash of P207,500 is available for distribution to partners. Any capital deficiency is made good by the deficient partner, since all three partners are personally solvent. How much was the loss on realization? how much would Nina receive in the final settlement of his interest? how much would Ricci receive in the final settlement of his interest?
In liquidation, balances prior to the distribution of cash to the partners are: Cash P255,000; Moore, Capital P140,000; Simon, Capital P130,000, and Kelly, Capital P30,000. The income ratio is 6:2:2, respectively. How much cash should be distributed to Simon if Kelly does not pay his deficiency? -P122,500 -P130,000 -P126,250 -P118,750 the Following are classified under PPE Except? -Building -Land -Machinery -All are PPE Which of the following is considered as a Cash Equivalent? -Check -Postal money Order -Treasury Bill Issued 5 Months Ago , Acquired and Maturing 4 months from now -Treasury Bill Issued 1 year ago Acquired and Maturing 3 months from now
Partners Ong, Rodriguez, Pamittan and Reyes who share profits andlosses at 30%, 30%, 20% and 20%, respectively, decided to liquidate. Allpartnership assets are to be converted into cash. Before liquidation, thecondensed statement of financial position follows:Cash P100, 000 Liabilities P750, 000Other Assets 1, 800, 000 Rodriguez, Loan 60, 000Reyes, Loan 50, 000Ong, Capital 420, 000Rodriguez, Capital 315, 000Pamittan, Capital 205, 000Reyes, Capital 100, 000Total P1, 900,000P1, 900,000The non-cash assets realized P800, 000, resulting to a loss of P1, 000,000. All the partners are solvent, and can contribute any additional cash tocover any deficiency. In the process of liquidation, deficiencies will occur andwill require additional investment as follows:a. Pamittan at P7, 500b. Reyes at P50, 000c. Reyes and Pamittan for P50, 000 and P7, 500, respectivelyd. None
ABC had capital balances of P40,000, P25,000 and P5,000 respectively with profit sharing ratio of 3:2:1 respectively. The partners decided to dissolve and liquidate. They sold all the non-cash assets for P37,000 cash. After settlement of all liabilities amounting to P12,000, they still have P28,000 cash left for distribution. What was the loss on the realization o the non-cash assets?
The Sheen, Jimmy and Carl partnership had the following balance sheet just before entering liquidation: Cash P10,000 Liabilities P130,000 Noncash assets 300,000 Sheen, capital 60,000 Jimmy, capital 40,000 Carl, capital 80,000 P310,000 P310,000 Sheen, Jimmy and Carl share profits and losses in a ratio of 2:4:4. Non-cash assets were sold for P180,000. Liquidation expenses were P10,000. Assume that Jimmy was personally insolvent and could not contribute any assets to the partnership, while Sheen and Carl were both solvent. What amount of cash would Sheen receive from the distribution of partnership assets?