. The balance sheet of Evergreen Company at June 30, 2012 contains the following items:AssetsCashP80,000Accounts receivable (net)140,000Inventories100,000Land260,000Building – net200,000Machinery – net120,000Patent100,000TotalP1,000,000 Liabilities and Stockholders' EquityAccounts PayableP 220,000Wages Payable120,000Taxes Payable20,000Mortgage Payable300,000Interest on Mortgage Payable30,000Notes Payable – unsecured100,000Interest Payable - unsecured10,000Capital Stock400,000Retained Earnings (deficit)(200,000)TotalP1,000,000The company is in financial difficulty, and its stockholders and creditors have requested a statement ofaffairs for planning purposes. The following information is available:a. The company estimates that P126,000 is the maximum amount of collectible for the accountsreceivable.b. Except for 20% of the inventory items that are damaged and worth only P4,000, the cost ofother items is expected to be recovered in full.c. The land and building have a combined appraisal value of P340,000 and are subject to theP300,000 mortgage and related accrued interest.d. The appraised value of the machinery is P40,000.Compute the following:• How much is the net free assets?• How much is the total unsecured liabilities with priority?How much is the total unsecured liabilities without priority?Compute the estimated settlement per peso of unsecured creditors.\

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Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 10MC

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The balance sheet of Evergreen Company at June 30, 2012 contains the following iter Assets Cash P 80,000 Accounts receivable (net) 140,000