ABC Corporation is experiencing difficulty in paying its bills and is considering filing for bankruptcy. Current data show: Book Value 4,000 40,000 36,000 50,000 1,000 10,000 70,000 20,000 45,000 16,000 P292,000 P 77,000 0911 Secured by: Bank Loan Reminder from the $25,000andbook: Code of 70% of receivables Wages Payable Cheating during exam12,000, quizzes or plagiarism in connection Taxes Payable with any academic wo 8,000ting of the same: 1st violation- Truck Loan warning with invalidat 5,000rade; Truck with P12,000 BV & P2,500 ERV Mortgage Payablespension with inva43,000 f grade; 3rd violatiLand and Building Loan Payable to dismissal/ non-rea50,000 with invalidation of Finished Goods Shareholder Loan Not subordinated to other debt Assets Building Trucks Cash Accounts Receivable Inventory - Materials Inventory - Finished Goods Prepaid Expenses Land Equipment Intangibles Total Assets Liabilities Accounts Payable INTI SAPIE UNIVERSI Est. Realizable Value P 4,000 20,000 0 42,000 60,000 6,000 0 EDIFICA 110,000 (38,000) Shareholders' Equity Total Liabilities and Equity P292,000 Compute for the amount to be paid to unsecured creditors (partial and without priority)

ABC Corporation is experiencing difficulty in paying its bills and is considering filing for bankruptcy. Current data show: Book Value 4,000 40,000 36,000 50,000 1,000 10,000 70,000 20,000 45,000 16,000 P292,000 P 77,000 0911 Secured by: Bank Loan Reminder from the $25,000andbook: Code of 70% of receivables Wages Payable Cheating during exam12,000, quizzes or plagiarism in connection Taxes Payable with any academic wo 8,000ting of the same: 1st violation- Truck Loan warning with invalidat 5,000rade; Truck with P12,000 BV & P2,500 ERV Mortgage Payablespension with inva43,000 f grade; 3rd violatiLand and Building Loan Payable to dismissal/ non-rea50,000 with invalidation of Finished Goods Shareholder Loan Not subordinated to other debt Assets Building Trucks Cash Accounts Receivable Inventory - Materials Inventory - Finished Goods Prepaid Expenses Land Equipment Intangibles Total Assets Liabilities Accounts Payable INTI SAPIE UNIVERSI Est. Realizable Value P 4,000 20,000 0 42,000 60,000 6,000 0 EDIFICA 110,000 (38,000) Shareholders' Equity Total Liabilities and Equity P292,000 Compute for the amount to be paid to unsecured creditors (partial and without priority)

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter6: Business Expenses

Section: Chapter Questions

Problem 43P

See similar textbooks

Similar questions

Marmol Corporation uses the allowance method for bad debts. During 2019, Marmol charged 50,000 to bad debt expense and wrote off 45,200 of uncollectible accounts receivable. These transactions resulted in a decrease in working capital of: a. 0 b. 4,800 c. 45,200 d. 50,000
Aron Larson is a customer of Bank Enterprises. Mr. Larson took out a loan in the amount of $120,000 on August 1. On December 31, Bank Enterprises determines the loan to be uncollectible. Larson had not paid anything toward the balance due on account. What is the journal entry recording the bad debt write-off?
It is February 16, 2020, and you are auditing Davenport Corporation's financial statements for 2019 (which will be issued in March 2020). You read in the newspaper that Travis Corporation, a major customer of Davenport, is in financial difficulty. Included in Davenports accounts receivable is 50,000 (a material amount) owed to it by Travis. You approach Jim Davenport, president, with this information and suggest that a reduction of accounts receivable and recognition of a loss for 2019 might be appropriate. Jim replies, Why should we make an adjustment? Ted Travis, the president of Travis Corporation, is a friend of mine; he will find a way to pay us, one way or another. Furthermore, this occurred in 2020, so lets wait and see what happens; we can always make an adjustment later this year. Our 2019 income and year-end working capital are not that high; our creditors and shareholders wouldnt stand for lower amounts than they already are. Required: From financial reporting and ethical perspectives, prepare a response to Jim Davenport regarding this issue.
Lugi Ka Na Company has been forced into bankruptcy as of April 30 because of its inability to pay its debts.The statement of financial position on that date shows:ASSETS LIABILITIES & EQUITYCash P5,400 Accounts Payable P105,000Accounts Receivable 78,700 Notes Payable – PNB 30,000Note Receivable 37,000 Notes Payable – suppliers 102,500Inventory 175,700 Accrued wages 3,700Prepaid Expenses 1,900 Accrued taxes 9,300Land and Building 122,500 Mortgage Bonds Payable 180,000Equipment, net 97,600 Common stock – P100 par 150,000Retained Earnings (61,700)Total Assets P518,800 Total Liabilities & Equity P518,800Additional information:a. Accounts receivable of P32,220 and notes receivable of P25,000 are expected to be collectible. The goodnotes are pledged to Philippine National Bank.b. Inventories are expected to bring in P90,200 when sold under bankruptcy conditions.c. Land and buildings have an appraised value of P190,000. They serve as security on the bonds.d. The current value of the…
Assume that Toni Braxton Company has recently fallen into financial difficulties. By reviewing all available evidence on December 31, 2020, one of Toni Braxton’s creditors, the National American Bank, determined that Toni Braxton would pay back only 65% of the principal at maturity. As a result, the bank decided that the loan was impaired. If the loss is estimated to be $225,000, what entry(ies) should National American Bank make to record this loss?
Solstice Company determines on October 1 that it cannot collect $50,000 of its accounts receivable from its customer, P. Moore. It uses the direct write-off method to record this loss as of October 1. On October 30, P. Moore unexpectedly pays his account in full to Solstice Company. Record Solstice’s entries for recovery of this bad debt.
Ali Coffee Bean assumes that due to Corona, at the end of September 2020 there will be bad debts of $5,000,000 from accounts receivable belonging to Budi's Coffee Shop amounting to $20,000,000. It turned out that on October 21, 2020, Budi's Coffee Shop stated that they were unable to pay their receivables amounting to $1,000,000, so the CEO of Ali Coffee Bean allowed to write-off the receivables. As Ali Coffee Bean's financial staff, make:a. Journal Entry for write-off of Budi's Coffee Shop.b. What was the cash realizable value of Ali Coffee Shop's receivables prior to the write-off of Budi's Coffee Shop receivables in September?c. What is the cash realized value of Ali Coffee Shop's receivables after the write-off of Budi's Coffee Shop receivables?
Dexter Company uses the direct write-off method. Prepare journal entries to record the following transactions. Mar. 11 Dexter determines that it cannot collect $45,000 of its accounts receivable from Leer Co. 29 Leer Co. unexpectedly pays its account in full to Dexter Company. Dexter records its recovery of this bad debt.
Solstice Company, which uses the direct write-off method, determines on October 1 that it cannot collect $52,000 of its accounts receivable from its customer, P. Moore. On October 30, P. Moore unexpectedly pays his account in full to Solstice Company. Record Solstice’s entries for recovery of this bad debt. Record the reinstatement of the account previously written off
Miner Company is being forced into bankruptcy. The Company’s creditors and stockholders have requested an estimate of the results of liquidation of the Company. Miner’s trial balance follows: Accounts Debit Credit Cash P6,000 Accounts receivable 63,000 Allowance for bad debts P2,000 Notes receivable 50,000 Accrued interest on notes receivable 1,200 Inventory 60,000 Buildings 182,000 Accumulated depreciation-Buildings 63,000 Equipment 14,600 Accumulated depreciation-Equipment 1,400 Prepaid insurance 1,100 Goodwill 8,500 Accrued wages 6,000 Taxes payable 2,400 Accounts payable and other liabilities 170,000 Notes payable 80,000 Accrued interest payable 1,600 Common stock 110,000 Retained earnings (deficit) 50,000 Total P436,400 P436,400 The assets are expected to bring cash on…
XYZ company is closing its books and must prepare a bank reconciliation for the following items. a. Bank statement contains an ending balance of P300,000 on February 28, 2018, whereas the company's ledger shows an ending balance of P260,900 b. Bank statement contains a P100 service charge for operating the account. c. Bank statement contains interest income of P20 XYZ issued checks of P50,000 that have not yet been cleared by the bank XYZ deposited P20,000 but this did not appear on the bank statement. d. A check for the amount of P470 issued to the office supplier was misreported in the cash payment journal as P370. e. A note receivable of P9,800 was collected by the bank. f. A check of P520 deposited by the company has been charged back as NSF.
On December 31, 2021 Mickey Mouse Corporation has been experiencing financial difficulty due to pandemic. Minnie Mouse Corporation had a Note Receivable from Mickey Mouse Corporation amounting to P5,000,000 which bears an interest of 10%. It also has an accrued interest of P500,000. Mickey Mouse Corporation and Minnie Mouse had an agreement to modify the notes. The following is the modification terms.- Reduction of Principal to P4,000,000- Reduction of interest to 8% payable annually beginning December 2022.- Principal payment is was reset to be paid on December 31, 2023.How much is the interest income on December 31, 2022? choices: 386,004 393,956 320,000 300,000