Distressed Corporation is undergoing liquidation. Relevant information as of January 1, 20x1 is shown below: ASSETS Carrying Amount Net Realizable Value Cash P250,000 P300,000 Accounts Receivable 150,000 355,649 Equipment-net 600,000 200
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Distressed Corporation is undergoing liquidation. Relevant information as of January 1, 20x1 is shown below:
ASSETS
Carrying
Amount
Net Realizable
Value
Cash P250,000 P300,000
Equipment-net 600,000 200,000
Land 1,700,000 1,500,000
TOTAL ASSETS P2,700,000 P2,355,649
LIABILITIES
Carrying
Amount
Settlement
Amount
Accounts Payable P1,000,000 P1,000,000
Salaries Payable 500,000 500,000
Notes Payable 800,000 805,234
Loan Payable 800,000 800,000
TOTAL LIABILITIES P3,100,000 P3,105,234
EQUITY
Share Capital P1,600,000
Capital Deficiency (400,000)
TOTAL LIABILITIES & EQUITY P2,700,000
Additional Information:
• Administrative expenses amounting to P180,744 are expected to be incurred during the liquidation
process.
• The equipment is pledged to the loan payable.
• The land is pledged to the notes payable.
QUESTIONS:
4. How much are the net free assets? _____________
5. What is the estimated deficiency? _____________
6. What is the estimated recovery percentage?
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- Distressed Corporation is undergoing liquidation. Relevant information as of January 1, 20x1 is shown below:ASSETSCarrying AmountNet Realizable ValueCash P250,000 P300,000Accounts Receivable 150,000 355,649Equipment-net 600,000 200,000Land 1,700,000 1,500,000TOTAL ASSETS P2,700,000 P2,355,649LIABILITIESCarrying AmountSettlement AmountAccounts Payable P1,000,000 P1,000,000Salaries Payable 500,000 500,000Notes Payable 800,000 805,234Loan Payable 800,000 800,000TOTAL LIABILITIES P3,100,000 P3,105,234EQUITYShare Capital P1,600,000Retained Earnings (2,000,000)Capital Deficiency (400,000)TOTAL LIABILITIES & EQUITY P2,700,000Additional Information:• Administrative expenses amounting to P180,744 are expected to be incurred during the liquidation process.• The equipment is pledged to the loan payable.• The land is pledged to the notes payable.QUESTIONS:1. How much are the total free assets? _____________2. How much are the unsecured liabilities with priority? _____________3. How much are…Distressed Corporation is undergoing liquidation. Relevant information as of January 1, 20x1 is shown below:ASSETSCarrying AmountNet Realizable ValueCash P250,000 P300,000Accounts Receivable 150,000 355,649Equipment-net 600,000 200,000Land 1,700,000 1,500,000TOTAL ASSETS P2,700,000 P2,355,649LIABILITIESCarrying AmountSettlement AmountAccounts Payable P1,000,000 P1,000,000Salaries Payable 500,000 500,000Notes Payable 800,000 805,234Loan Payable 800,000 800,000TOTAL LIABILITIES P3,100,000 P3,105,234EQUITYShare Capital P1,600,000Retained Earnings (2,000,000)Capital Deficiency (400,000)TOTAL LIABILITIES & EQUITY P2,700,000Additional Information:• Administrative expenses amounting to P180,744 are expected to be incurred during the liquidation process.• The equipment is pledged to the loan payable.• The land is pledged to the notes payable. QUESTIONS: 7. What is the amount paid to unsecured creditors without priority? _____________8. What is the amount paid to partially secured…Distressed Corporation is undergoing liquidation. Relevant information as of January 1, 20x1 is shown below:ASSETSCarryingAmountNet RealizableValueCash P250,000 P300,000Accounts Receivable 150,000 355,649Equipment-net 600,000 200,000Land 1,700,000 1,500,000TOTAL ASSETS P2,700,000 P2,355,649LIABILITIESCarryingAmountSettlementAmountAccounts Payable P1,000,000 P1,000,000Salaries Payable 500,000 500,000Notes Payable 800,000 805,234Loan Payable 800,000 800,000TOTAL LIABILITIES P3,100,000 P3,105,234EQUITYShare Capital P1,600,000Retained Earnings (2,000,000)Capital Deficiency (400,000)TOTAL LIABILITIES & EQUITY P2,700,000Additional Information:• Administrative expenses amounting to P180,744 are expected to be incurred during the liquidationprocess.• The equipment is pledged to the loan payable.• The land is pledged to the notes payable.QUESTIONS:1. What is the amount paid to unsecured creditors without priority? 2. What is the amount paid to partially secured creditors?
- Distressed Corporation is undergoing liquidation. Relevant information as of January 1, 20x1 is shown below:ASSETSCarryingAmountNet RealizableValueCash P250,000 P300,000Accounts Receivable 150,000 355,649Equipment-net 600,000 200,000Land 1,700,000 1,500,000TOTAL ASSETS P2,700,000 P2,355,649LIABILITIESCarryingAmountSettlementAmountAccounts Payable P1,000,000 P1,000,000Salaries Payable 500,000 500,000Notes Payable 800,000 805,234Loan Payable 800,000 800,000TOTAL LIABILITIES P3,100,000 P3,105,234EQUITYShare Capital P1,600,000Retained Earnings (2,000,000)Capital Deficiency (400,000)TOTAL LIABILITIES & EQUITY P2,700,000Additional Information:• Administrative expenses amounting to P180,744 are expected to be incurred during the liquidationprocess.• The equipment is pledged to the loan payable.• The land is pledged to the notes payable.QUESTIONS:1. How much are the total free assets? _____________2. How much are the unsecured liabilities with priority? _____________3. How much are the…ABC Company is in a capital deficiency position and is considering the possibility of liquidation. An analysis of the assets and liabilities of the entity is provided: Assets at net realizable value (pledged against liabilities of P150,000) 250,000 Assets at net realizable value (pledged against liabilities of P260,000) 100,000 Assets at net realizable value (not pledged against any liabilities) 160,000 Liabilities with priority 85,000 Unsecured creditors 400,000 Round off the estimated recovery percentage to XX.XX%, if needed. How much is the estimated payment to partially secured creditors?When AAA Company filed for liquidation with the Securities and Exchange Commission, it prepared the following statement of financial position: Current Assets (net realizable value, P50,000) P 80,000 Land and Building (fair value, P240,000) 200,000 Goodwill (fair value, 0) 40,000 Total Assets P320,000 Accounts Payable P160,000 Mortgage Payable (secured by land & building) 200,000 Ordinary share 100,000 Accumulated profits (140,000) Total Liabilities and Equity P320,000 What percentage of their claims are…
- present in good accounting form When AAA Company filed for liquidation with the Securities and Exchange Commission, it prepared the following statement of financial position: Current Assets (net realizable value, P50,000) P 80,000 Land and Building (fair value, P240,000) 200,000 Goodwill (fair value, 0) 40,000 Total Assets P320,000 Accounts Payable P160,000 Mortgage Payable (secured by land & building) 200,000 Ordinary share 100,000 Accumulated profits (140,000) Total Liabilities and Equity P320,000 What percentage of their claims are the unsecured creditors…ABC Corporation has the following information toestimate its liquidation value.Cash = 50,000Noncash Assets, Book Value = 100,000Noncash Assets, Selling Price =140,000Cost to Dispose (40% chance) =10,000Cost to Dispose (60% chance) =25,000Liabilities, Book Value = 60,000Liquidation cost to be incurred = 5,000Based on the information above, how much is the expected net liquidation value of the corporation? a. 90,000.00 b. 109,000.00 c. 125,000.00 d. 106,000.00All the issued and outstanding common stock of MOA Company were brought by Aura Company on October 1, 2020 for P700,000. The assets and liabilities of Aura Company were: Cash 50,000 Accounts receivable (net of P25,000 allowance for bad debts) 250,000 Inventory 150,000 Property & Equipment (net of P100,000, allowance for depreciation) 300,000 Accounts payable 130,000 On October 1, 2020 the fair value of the following assets was as follows: Accounts receivable (net) 235,000 Inventory 130,000 Property & equipment (net) 400,000 There is an unrecorded warranty liability on prior-product sales estimated P20,000 discounted cash flow based on estimated future cash flows. The amount of goodwill as a result of the business combination should be: a) 35,000 b) Zero c) 100,000 d) 65,000
- All the issued and outstanding common stock of MOA Company were brought by Aura Company on October 1, 2020 for P700,000. The assets and liabilities of Aura Company were: Cash 50,000 Accounts receivable (net of P25,000 allowance for bad debts) 250,000 Inventory 150,000 Property & Equipment (net of P100,000, allowance for depreciation) 300,000 Accounts payable 130,000 On October 1, 2020 the fair value of the following assets was as follows: Accounts receivable (net) 235,000 Inventory 130,000 Property & equipment (net) 400,000 There is an unrecorded warranty liability on prior-product sales estimated P20,000 discounted cash flow based on estimated future cash flows. The amount of goodwill as a result of the business combination should be:The Modesto Company is facing possible liquidation.Using the following information, prepare a statement offinancial affairs in good form.Here’s the company’s most recent balance sheet: Assets Liabilities and equities Cash $12,000 Accounts payable $170,000Accounts Receivable 60,000 Notes payable 90,000Inventory 120,000 Mortgage payable 80,000Investments 45,000Equipment 105,000 Common stock 75,000Land 82,000 Retained earnings 9,000Total assets $424,000 Total Liab. and Eq’s $424,000 The mortgage payable is fully secured by the land. The land can be soldimmediately for $103,000The equipment partially secures the notes payable. The equipment is not ingood shape and at auction will bring only $30,000The market has declined so the investments have lost 40% of their value.It is estimated that 30% of the accounts receivable will have to be written off.The inventory is outdated and will bring only 50% of its book value atauction.Additional income taxes will be $26,000Administrative expenses for…Maharlika Company filed for liquidation with the Philippine Securities and Exchange Commission. Its latest statement of financial position provided the following information: Current assets P160,000 Non-current assets 400,000 Goodwill 80,000 Total assets P640,000 Accounts payable P320,000 Mortgage payable 400,000 Share capital 200,000 Deficit (280,000) Total liabilities and shareholders’ equity P640,000 Additional information: 75% of the current assets are non-cash assets with a net realizable value of P75,000. The non-current assets are composed of real properties which has a fair value of P480,000 and is used as a security for the mortgage payable. How much is the expected amount of payment for the mortgage payable?