DAYAG advac SolutionChapter6.docx
-
Upload
lawrence-lamban -
Category
Documents
-
view
2.949 -
download
144
description
Transcript of DAYAG advac SolutionChapter6.docx
Chapter 6
Problem I1. Statement of Affairs - Formal
MINER COMPANYStatement of Affairs
May 31, 2012Book Value
AssetsRealizable
ValueAssets Pledged with Fully Secured Creditors:
P 50,000 Notes Receivable P39,8001,200 Accrued Interest Rec. 1,000 P 40,800
Notes Payable 40,000 Accrued Interest Pay. 800 40,800
119,000 Building 75,000Note Payable 20,000Accrued Interest Pay. 800 20,800 P 54,200
Assets Pledged with Partially Secured Creditors:13,200 Equipment 4,200
Note Payable 10,000
Free Assets6,000 Cash 6,000
61,000 Accounts Receivable 50,00060,000 Inventory 30,000
1,100 Prepaid Insurance 4008,500 Goodwill 0
Total Net Realizable Value 140,600 Liabilities having Priority – Wages 6,000
Taxes 2,400 8,400Net Free Assets 132,200
Estimated Deficiency to Unsecured Creditors 53,600P 320,000 P 185,800
Book Value Equities
Unsecured
Liabilities Having Priority:P 6,000 Accrued Wages P 6,000
2,400 Taxes Payable 2,400 P 8,400
Fully Secured Creditors:60,000 Notes Payable 60,000
1,600 Accrued Interest Payable 1,600 61,600
Partially Secured Creditors:10,000 Note Payable 10,000
Equipment 4,200 P 5,800
Unsecured Creditors:170,000 Accounts Payable 170,000
10,000 Notes Payable 10,000
Stockholders’ Equity110,000 Common Stock
( 50,000) Retained Earnings (Deficit)
P 320,000 P 185,800
2. Deficiency Statement to determine estimated deficiency to unsecured creditors:
Deficiency AccountMay 31, 2012
Estimated Losses: Estimated Gains: Accounts Receivable P 11,000 Common Stock P
110,000 Notes Receivable 10,400 Retained Earnings (50,000) Inventory 30,000 Estimated Deficiency to Buildings 44,000 Unsecured Creditors 53,60
0 Equipment 9,000 Prepaid Insurance 700 Goodwill 8,500
P113,600 P 113,600 Estimated final dividend rate to unsecured creditors is: P132,200/P185,800 = 71.15%
Problem II 1. Formal
Down Dog CorporationStatement of Affairs
June 30, 2014
DeficiencyAccount
Book Value Assets Realizable Value (Loss/Gain)Pledged with partially secured creditors
P165,000 Equipment-net P87,000 (78,000)Less: Note payable and accrued interest (96,000 ) P 0Unsecured amount (See below) (9,000)
Free Assets3,000 Cash 3,000
72,000 Accounts receivable-net 48,000 (24,000)60,000 Inventories 72,000 12,000
Total net realizable value 123,000Less: Priority liabilities – wages payable (45,000 ) Total available for unsecured creditors 78,000
______ Estimated deficiency to unsecured creditors 30,000 ______P300,000 P108,000 (90,000)
Unsecured Book Value Equities Liabilities
Priority liabilitiesP 45,000 Wages payable (assumed under
P4,650 per employee) P 45,000
Partially secured creditors96,000 Note payable and accrued interest P 96,000
Less: Equipment pledged as security (87,000 ) P 9,000
Unsecured creditors72,000 Accounts payable 72,00027,000 Rent payable 27,000
Stockholders’ equity180,000 Capital stock 180,000
(120,000 ) Retained earnings (deficit) ______ (120,000 ) P300,000 P108,000 P 60,000
Estimated Deficiency P(30,000 )
2. Estimated payments per dollar for unsecured creditors Cash available P210,000 Distribution to partially secured and unsecured priority creditors:
Note payable and interest P87,000Administrative expenses 24,000Wages payable 45,000 (156,000 ) Available to unsecured nonpriority creditors P 54,000
Note payable and interest (unsecured portion) P 9,000 Accounts payable 72,000 Rent payable 27,000
Unsecured nonpriority claims P108,000
(P54,000 / P108,000 = P0.50 per peso)
Expected recovery for each class of claimsPartially securedNote payable and interest
Secured portion P87,000Unsecured portion (P9,000 × 0.50) 4,500 P91,500
Unsecured priorityAdministrative expenses P24,000Wages payable 45,000 69,000
Unsecured nonpriorityAccounts payable (P72,000 × 0.50 P36,000Rent payable (P27,000 × 0.50) 13,500 49,500Total payments P210,000
Problem IIIRealizable value of all assets (P635,000 + P300,000 + P340,000)P1,275,000Allocated to:
Fully secured creditors (316,000)Partially secured creditors (300,000)
Unsecured creditors with priority (100,000)Remainder available to general unsecured creditors P559,000
Payment rate to general unsecured creditors (Including balance due to partially secured creditors) P559,000 / (P1,165,000 + (P400,000 - P300,000)) 44.2%
Realizable value of assets:Assets pledged to fully secured creditors P635,000Assets pledged to partially secured creditors 300,000Free assets 340,000 Total realizable value P1,275,000
Amounts to be paid to:Fully secured creditors P316,000Partially secured creditors [P300,000 + (0.442 × P100,000)] 344,200Unsecured creditors with priority 100,000General unsecured creditors (0.442 × P1,165,000) 514,800* Total P1,275,000
*Rounded P130
Problem IVFree Assets:
Current Assets ................................................................. P 35,000Buildings and Equipment ................................................. 110,000
Total ......................................................................... P145,000
Liabilities with Priority:Administrative Expenses .................................................. P 20,000Salaries Payable (only P3,000 per employee)................... 6,000Income Taxes ................................................................... 8,000
Total ......................................................................... P 34,000
Free Assets After Payment of Liabilities with Priority (P145,000 – P34,000) ...................................................... P111,000
Unsecured LiabilitiesNotes Payable (in excess of value of security) ................. P 30,000Accounts Payable ............................................................. 85,000Bonds Payable .................................................................. 70,000
Total ......................................................................... P185,000
Percentage of Unsecured Liabilities To Be Paid: P111,000/P185,000 = 60 %
Payment On Notes Payable:Value of Security (land) .................................................... P 90,00060% of Remaining P30,000 .............................................. 18,000Total Collected by holders ................................................ P108,000
Problem VFree Assets:
Cash ......................................................................... P30,000Receivables (30 percent collectible)................................. 15,000Inventory ......................................................................... 39,000
Land (value in excess of secured note:P120,000 – P110,000).................................................. 10,000Total ......................................................................... P94,000
Less: Liabilities with prioritySalary payable (below maximum)............................... (10,000)Free assets available................................................... P84,000
Unsecured Liabilities:Accounts payable.............................................................. P90,000Bonds payable (less secured interest in
building: P300,000 – P180,000)................................... 120,000Unsecured liabilities.................................................... P210,000
Percentage of unsecured liabilities to be paid: P84,000/P210,000 = 40%
Amounts to be paid for:Salary payable (liability with priority to be paid
in full) ......................................................................... P10,000Accounts payable (unsecured—will collect 40%
of debts of P90,000).................................................... P36,000Note payable (fully secured by land—will collect
entire balance)........................................................... P110,000Bonds payable (partially secured—will collect
P180,000 from building and 40 percent of the remaining P120,000)................................................... P228,000
Problem VI
Class of Creditors
Total Creditor’s
Claims
Total Amounts
Expected to be
Recovered
% of Total Claims
Expected to be
RecoveredFully secured liabilitiesPartially secured liabilitiesUnsecured liabilities with priorityUnsecured liabilities without priority
183,60054,60030,810
182,500
183,60051,72030,810
116,800
100.094.7
100.064.0
Problem VII1. Total estimated proceeds P910,000
Less asset proceeds claimed by secured creditors: Notes payable and interest (from proceeds of receivables and inventory) P150,000 Mortgage payable and interest (from proceeds of land and building) 320,000 470,000 Total available to unsecured claimants. P440,000 Less distributions to unsecured claims with priority: Wages payable P 10,000 Taxes payable 20,000 30,000 Amount available for unsecured claims P410,000
2. Unsecured portion of notes payable and interest (P500,000 + P30,000 – P150,000) P380,000
Accounts payable 260,000Total claims ofunsecured creditors P640,000Dividend to Unsecured Creditors P410,000 ÷ P640,000 = 64.1%
3. Unsecured portion of notes payable and Interest P380,000 Dividend on unsecured amount 64.1 % Amount received on unsecured portion P243,580 Proceeds from receivables and inventory 150,000 Total Received P393,580
Dividend to note holders: P393,580 ÷ P530,000 = 74.3%
Problem VIII1.
WILBUR CORPORATIONSTATEMENT OF AFFAIRS
DECEMBER 31, 20x4Assets
Book Value
Estimated Current Values
Estimated Amount
Available to Unsecured
Claims
Estimated Gain
(Loss) on Realizatio
n(1) Assets pledged with fully secured creditors:
P 40,000 Accounts receivable (net) P 40,000 Less: 10% note payable and
interest 38,500 P 1,500
50,000 Land P 65,000 P 15,000 110,000 Plant and equipment (net) 100,000 (10,000)
P165,000 Less: Mortgages payable and interest (157,500) 7,500
(2) Assets pledged with partially secured creditors:
20,000 Marketable securities P 16,000 (4,000) Less: 10% note payable and interest (20,800)
35,000 Inventory P 32,000 (3,000) Less: Accounts payable (60,000)
(3) Free assets: 4,000 Cash P 4,000 4,000 35,000 Accounts receivable (net) 35,000 35,000 55,000 Inventory 50,000 50,000 (5,000)
6,000 Prepaid insurance 1,000 1,000 (5,000) 140,000 Plant and equipment (net) 60,000 60,000 (80,000)
48,000 Franchises 15,000 15,000 (33,000)
Estimated amount available P 174,000Less: Creditors with priority (43,000)Net available to unsecured creditors P 131,000Estimated deficiency 45,000
P 543,000 (P 125,000)
Total unsecured debt P 176,000 2. Percentage to unsecured creditors: P131,000/P176,000 = 74.43%
Problem IX
Smith CompanyStatement of Realization and Liquidation
AssetsAssets to be realized Assets Realized
Old Receivebles, net P 50,000
Old Receivbles P 28,000
Marketable Securities 20,000
New Receivbles 65,000
Old Inventory 72,000
Marketable Securities 15,000
Depreciable Assets, net 120,000
Sales of Inventory 100,000
Assets Acquired Assets Not Realized
New Receivables 100,000
Old Receivables, net 22,000New Receivables, net 35,000Depreciable Assets 96,000
Supplementary ItemsSupplementary Charges Supplementary Credits
Old Current Payables P 31,000
Net Loss P 7,000
LiabilitiesLiabilities Liquidated Liabilities to be Liquidated
Old Current Payables P 31,000
Old Current Payables P 65,000
Liabilities Not Liquidated Liabilities Incurred
Old Current Payables P 34,000
________
P433,000
P 433,000
Problem XMallory Corporation
Statement of Realization and LiquidationFor the Three Months Ended July 31, 20x5
AssetsAssets Cash Non-Cash
Beginning balances assigned 5/1/x5 P 4,000 P720,000 Cash Receipts: Collection of Accounts Receivable 60,000 (70,000) Sale of inventory 170,000 (200,000) Sale of land and building 20,000 (340,000) Sale of machinery 70,000 (100,000)Cash Disbursements: Payment of salaries payable (60,000) Partial payment of accounts pay. (170,000) Partial payment of bank loan (70,000)
Ending balance P24,000 P10,000
LiabilitiesUnsecured
Fully Partially With Without Owner'sAssets Secured Secured Priority Priority Equity
Beginning balances assigned 5/1/X5
P240,000
P270,000
P94,000 P 0 P120,000 Cash Receipts: Collection of Accounts Receivable
(10,000) Sale of inventory (30,000) Sale of land and building (240,00
0)(80,000)
Sale of machinery (30,000)Cash Disbursements: Payment of salaries payable (60,000
) Partial payment of accounts pay
(180,000)
10,000 Partial payment of bank loan ________ (90,000) ________ 20,000 ________Ending balance P
0 P P 0
P34,000 P30,000 P (30,000)
Multiple Choice Problems1. d – since there is parent and subsidiary relationship, any intercompany accounts are
eliminated from consolidated point of view.
2. a - [P90,000 + P36,000 + P10,000 – P45,000 = P91,000 total estimated amount available; P91,000 – (P4,500 + P10,000) = P76,500 estimated amount available for unsecured, non-priority creditors; P76,500 P90,000 = 0.85]
3. c – it is a partially secured liability
4. d – [(P1,110,000 – P780,000) + P960,000] – P210,000 = P1,080,000
5. b – P25,000 + [.30 x (P75,000 – P25,000)] = P40,000
6. d – (P555,000 – P390,000) + P480,000 = P645,000 – P105,000 = P540,000
7. b – P30,000 + [.30 x (P90,000 – P30,000)] = P48,000
8. c – [ P110,000 + (P150,000 – P110,000) x 40%] = P128,000
9. d
10. c – P60,000 + [(P120,000 + P6,000) – (P30,000 + P35,000) = P121,000
11. b - P20,000 + P80,000 + [P170,000 – (P150,000 + P7,000)] = P113,000 – (P10,000 + P10,000) = P93,000
12. c – P93,000/P121,000 = 77% rounded.
13. a Net Free Assets: (P700,000 – P300,000) + P70,000 + P230,000 = P700,000 – P140,000 = P560,000 Total Unsecured Creditors without priority: (P400,000 – P300,000) + P600,000 = P700,000
14. c - Pension P10,000 + Salaries P35,000 (= P10,600 + P10,950 + P10,950 + P2,500) + Taxes P80,000 + Liq. expenses P40,000 = P165,000.
15. c Statement of Realization and Liquidation
Assets to be Realized…………. P 1,375,000 Assets Realized…………………..P 1,200,000 Assets Acquired……………….. 750,000 Assets Not Realized…………… 1,375,000 Liabilities Liquidated…………. 1,875,000 Liabilities to be Liquidated…. 2,250,000 Liabilities Not Liquidated……. 1,700,000 Liabilities Assumed………….. 1,625,000 Supplementary charges/ Supplementary credits……… 2,800,000 debits……………………… 3,125,000
P 8,825,000 P 9,250,000
Net Gain……………………….. P 425,000
16. No requirement
17. c Total Liabilities (refer to Liabilities not liquidated–No. 14)…………………… P1,700,000 +: Stockholders’ Equity (P1,500,000 – P500,000)………………………………… 1,000,000 Total LSHE = Total Assets…………………………………………………………… P 2,700,000 -: Noncash assets (refer to Assets not realized-No. 14)……….……………… 1,375,000 Cash balance, ending………………………………………………………………P1,325,000
18. P440,000 Total Free Assets:
Fully secured: Land and building: P650,000 – (P300,000 + P20,000) = P 330,000
Free assets:Cash 10,000 Equipment 100,000 P440,000
Or,Total estimated proceeds P910,000 Less asset proceeds claimed by secured creditors: Notes payable and interest (from proceeds of receivables and inventory) P150,000
Mortgage payable and interest (from proceeds of land and building) 320,000 470,000Total available to unsecured claimants/total free P440,000
19. P410,000Total available to unsecured claimants/total free P440,000 Less distributions to unsecured claims with priority: Wages payable P 10,000 Taxes payable 20,000 30,000 Amount available for unsecured claims/net free assets P410,000
20. P640,000 = P260,000 + [(P50,000 + P100,000) – (P500,000 + 30,000), orUnsecured portion of notes payable and interest (P500,000 + P30,000 – P150,000) P380,000 Accounts payable 260,000Total claims of unsecured creditors P640,000
21. 64.1%
Dividend to unsecured creditors P410,000 ÷ P640,000 = 64.1%
22. P320,000 = P300,000 + P20,000
23. P393,580Unsecured portion of notes payable and interest P380,000 Dividend on unsecured amount x 64.1% Amount received on unsecured portion P243,580 Proceeds from receivables and inventory 150,000 Total Received P393,580
Dividend to note holders: P393,580 ÷ P530,000 = 74.3%
24. P30,00025. P166,666 = P260,000 x 64.126. P910,247 = P320,000 + P393,580 + P30,000 + P166,666 (discrepancy of P247 due to
rounding-off)27. P230,000 Net free assets (No. 19) P410,000 Less: Unsecured creditors without priority (No. 20) 640,000
P230,00028. P340,000 = P910,000 – P1,250,000
29. P340,000, same with No. 28, since there are no unrecorded expenses liabilities)
30. P60,675 – you may the same procedure in Nos. 18 to 29 to solve this problem, the following is the formal presentation of statement of affairs
Estimated Estimated Amt Estimated
Net Realizable
Value
Avail for Unsecured
Creditors
Gain or (Loss)on
Liquidation Book
Value AssetsAssets pledged with fully secured creditors:
98,500 Land and Bldg 92,800 22,200 (5,700)5,800 Investment in Calandir 15,000 4,625 9,200
Total 107,800 Assets pledged with partially secured creditors:
41,000 Inventory 20,000 (21,000)43,000 Equipment 8,000 (35,000)
Free Assets: 1,850 Cash 1,850 1,850 0 21,200 Accounts Rec 17,000 17,000 (4,200)15,000 Note Rec 15,000 15,000 0
Estimated Amount Avail for unsecured creditors with and without priority 60,675 Less unsecured creditors with priority (3,775)Estimated amounts for unsecured creditors without priority (Net Free Assets): Net Realizable Amount Avail 56,900
_______ Deficiency _______ 15,725 _______226,350 169,650 72,625 (56,700)
Estimated Estimated Unsecured Amount Book Liabilities Secured With Without
Value and Owners Equity Amount Priority Priority Fully Secured Creditors:
600 Accrued Mtg Interest 600 70,000 Mortgage Payable 70,000
375 Accrued N/P Interest 375 10,000 Note Payable 10,000
Total 80,975 Partially SecuredCreditors:
50,000 Accounts Payable 28,000 22,000 Unsecured Creditors withPriority:
3,775 Accrued Payroll 3,775 Unsecured creditors withoutPriority:
40,625 Accounts Payable 40,625 10,00
0 Other Accrued Liabilities _______ 10,000
185,375 Totals 108,975 3,775 72,625 40,975 Owner Equity226,350
31. P56,900 – refer to No. 30 for computation32. P72,625 – refer to No. for computation33. Dividend - P56,900/P72,625 = P.78 – refer to No. 30 for further computation34. P80,975 – refer to No. 30 for computation 35. P45,160 = P28,000 + (P22,000 x 78%)36. P3,77537. P39,487.50 = 78% x (P40,625 + P10,000)38. P169,397.50 No. 34……………..P 80.975 No. 35…………….. 45,160 No. 36…………….. 3,775
No. 37…………….. 39,487.50 P169,397.50 (discrepancy around P250 plus due to rounding-off)
39. P15,725 – refer to No. 30 or P56,700, estimated net loss – P40,975, owners’ equity40. P56,700 – refer to No. 30 or P169,650 – P226,35041. P56,700 (same with No. 40 since there are no unrecorded expenses liabilities)42. P22,475
LiabilitiesUnsecured
Assets Fully Partial With Without Owners' Cash Noncash Secured Secured Priority Priority Equity
6/1/x5 Balances:1,850 224,500 80,975 50,000 3,775 50,625 40,975
Cash Receipts:Securities Sale
16,000 (5,800) 10,200
N/R Collected 15,000 (15,000) 0 Equipment Sale
7,000 (43,000) (36,000)
Inventory Sale
22,000 (41,000) (19,000)
Cash Disbursements:Bank Loan (10,375
)(10,375
)Part Pyt-A/P (29,00
0)---------- --------- (50,00
0)------- 21,000 ----------
6/30 Balance 22,475 119,700 70,600 0 3,775 71,625 (3,825)
43. P119,700 – refer to No. 4244. P70,600 – refer to No. 4245. None – refer to No. 4246. P3,775 – refer to No. 4247. P71,625 – refer to No. 4248. (P3,825) deficit – refer to No. 4249. P150,900
Book Value Assets
Estimated Net
Realizable Value
Estimated Amount
Available for
Unsecured Creditor
Estimated Gain or
(Loss) on Liquidation
Assets pledged with fully secured creditors: 57,000 Accounts receivable (net) 45,000 12,600 (12,000)174,000 Land, plant and equipment (net) 150,000 77,400 (24,000)
Total 195,000Free assets:
6,000 Notes receivable 6,000 6,000 0 900 Accrued interest receivable 900 900 0
90,000 Inventories (90,000 x 60%) 54,000 54,000 (36,000)Estimated amount available for
unsecured creditors with and without priority 150,900
Less unsecured creditors with priority (26,900)Estimated amounts for unsecured
creditors without priority:
Net realizable amount available 124,000 Deficiency 26,000
327,900 Totals 255,900 150,000 (72,000)
Estimated Secured Amount
Estimated Unsecured Amount
With PriorityWithout Priority
Book Value Liabilities and Owners' Equity
Fully secured creditors: 3,600 Accrued interest 3,60069,000 Note payable 69,000
2,400 Accrued interest 2,40030,000 Note payable 30,000
Total 105,000Unsecured creditors with priority:
24,900 Wages payable 24,900
0 Administration fees – accountant’s fee 2,000Unsecured creditors without priority:
0 Accrued interest 018,000 Cash overdraft 18,000
6,000 Notes payable 6,000 126,000 Accounts payable -------- -------- 126,000
279,900 Totals 105,000 26,900 150,000 48,000 Owners' equity--see Note A327,900
Note A: Includes the effect of the P2,000 professional fee.
50. P124,000 – refer to No. 4951. P150,000– 52. 82.67% = P124,000/P150,00053. P105,00054. None55. P26,90056. P124,005 = P150,000 x 82.67%57. P255,900 = P72,000 + P26,900 + P124,005 (discrepancy of P5)58. P26,000 = (P72,000 + P2,000 unrecorded ) – P48,000 or P150,000 – P124,00059. P72,000 – refer to No. 4960. P74,000 = P72,000, loss of realization of assets + P2,000 unrecorded expenses
Quiz - VI1. P96,000
Claims of partially secured creditors.................................................. P 120,000Current value of assets pledged with these creditors............................ (80,000 )Deficiency that is unsecured.................................................................. P 40,000Claims of other unsecured creditors.................................................... 360,000 Total unsecured creditors claims....................................................... P 400,000
Amount available to unsecured creditors: Excess left over after paying fully secured creditors (P195,000 – P150,000)........................................................................ P 45,000 Current value of free assets (net of P45,000 to creditors with priority)................................................................... 115,000 Amount available to unsecured creditors.......................................... P160,000
Settlement to unsecured claims per dollar (P160,000/P400,000).......... P .40
Total distribution to partially secured creditors: Current value of assets pledged.......................................................... P 80,000 Deficiency of P40,000 × P.40............................................................... 16,000
P 96,0002. P144,000 = P360,000 x 40%
3. P56,000Claims of partially secured creditors.................................................. P 90,000Current value of assets pledged with these creditors............................ (50,000 )Deficiency that is unsecured.................................................................. P 40,000Claims of other unsecured creditors.................................................... 200,000 Total unsecured creditors claims....................................................... P 240,000
Amount available to unsecured creditors: Excess left over after paying fully secured creditors (P300,000 – P250,000)........................................................................ P 50,000 Current value of free assets (net of P60,000 to creditors with priority)................................................................... (14,000 ) Amount available to unsecured creditors.......................................... P 36,000
Settlement to unsecured claims per peso (P36,000/P240,000).............. P .15
Total distribution to partially secured creditors: Current value of assets pledged.......................................................... P 50,000 Deficiency of P40,000 × P.15............................................................... 6,000
P 56,0004. P30,000 = P200,000 x 15%5. P35,000 = P20,000 + (P70,000 – P20,000) x 30%
6. P96,000 = Free assets P220,000 - priority claims P100,000 = P120,000 P120,000/P300,000 unsecured = payment of 40% on unsecured peso 40% x P240,000 A/P = P96,000
7. P474,000 = Land and building sold for P450,000 leaves P60,000 unsecured still owing. 40% x P60,000 = P24,0008. P295,000 = P200,000 + P95,0009. P42,950 - (P10,950 + P2,000 + P20,000 + P10,000)10. P76,050 - Excess of salaries, P1,050 + notes pay in excess of security P25,000 +
accounts pay P50,00011. P163,800
Free assets:Other assets P104,000Excess from assets pledged with secured (P150,800 – P91,000) 59,800
P163,80012. P109,200
Total free assets P163,800
Less: Liabilities with priority 54,600P109,200
13. P364,000 Unsecured creditors:
Excess of partially secured liabilities over Pledged assets (P169,000 – P65,000) P104,000Unsecured creditors 260,000
P364,00014. P96,200
Payment of partially secured debt:Value of pledged assets P 65,00030%* of remaining P104,000 31,200
P 96,200*P109,200/P364,000 = 30%
15. P78,000Cash P 65,000Excess of pledged with secured liabilities
(P117,000 – P104,000) 13,000P 78,000
16. P52,000Free assets after of liabilities with priority:
Total free assets P 78,000Less: Liabilities with priority 26,000
P 52,00017. P260,000
Unsecured creditors:Excess of partially secured liabilities over pledged assets (P195,000 – P169,000) P 26,000Accounts payable 234,000
P 260,00018. P174,200
Payment on bond:Value of pledged assets P 169,00020%* of remaining P26,000 5,200
P 174,200Free after priority: P52,000/P260,000 = 20%
19. P247,000 Free assets P390,000Excess from assets pledged with fully secured
(P260,000 – P195,000) 65,000Amount available P455,000Unsecured liabilities with priority ( 208,000)Net free assets / available for unsecured P247,000
20. P32,000Cash 120,000Mortgage payable, paid in full ( 60,000 )
60,000Note payable to bank, secured portion ( 30,000 )
30,000Priority claims (P16,000 of administrative costs + P2,000 of customer deposits + P4,000 property tax) ( 22,000 )Available for unsecured nonpriority claims 8,000
Unsecured, nonpriority claims:Unsecured portion of note payable to bank 10,000Accounts payable 30,000Total unsecured, nonpriority claims 40,000
P8,000 cash/P40,000 claims = P.20 on the dollarAmount paid to bank:P30,000 for secured portion + (P10,000 x .20) for unsecured portion = 32,000
21. P15,400Mortgage note receivable 35,000Less: Portion secured by equipment ( 7,000 )Unsecured portion 28,000
Estimated recovery on secured portion 7,000Estimated recovery on unsecured portion (P28,000 x P.30) = 8,400Recovery on mortgage note receivable 15,400
22.Mortgage note receivable 80,000Less: Portion secured by marketable securities ( 60,000 )Unsecured portion 20,000
Estimated recovery on secured portion 60,000Estimated recovery on unsecured portion (20,000 x P.25) = 5,000Recovery on mortgage note receivable 65,000
23. P30,000Book value of assets P700,000Net realizable of assets 370,000
P330,000Less stockholders' equity (P700,000 – P400,000) 300,000Deficiency P 30,000
24.
P.75 Dividend = P370,000 – P250,000 – P30,000 / P400,000 – P250,000 – P30,000
25.
P8,500 = P7,000 + [(P9,000 – P7,000) x .75]
26.
P410,000Total estimated proceeds P910,000 Less asset proceeds claimed by secured creditors: Notes payable and interest (from proceeds of receivables and inventory) P150,000 Mortgage payable and interest (from proceeds of land and building) 320,000 470,000 Total available to unsecured claimants. P440,000 Less distributions to unsecured claims with priority: Wages payable P 10,000
Taxes payable 20,000 30,000 Amount available for unsecured creditors P410,000
27.
64.10%Unsecured portion of notes payable and interest (P500,000 + P30,000 – P150,000) P380,000 Accounts payable 260,000Total claims of unsecured creditors P640,000
Dividend to unsecured creditors: P410,000 ÷ P640,000 = 64.1%
28.
Unsecured portion of notes payable and
Interest P380,000 Dividend on unsecured amount x 64.1% Amount received on unsecured portion P243,580 Proceeds from receivables and inventory 150,000 Total Received P393,580
Dividend to note holders: P393,580 ÷ P530,000 = 74.3%
THEORIES1. debtor2. P5,0003. inability to pay debts as they mature4. a. administrative costs
b. certain postfiling “gap” claims in involuntary filingsc. wages, salaries, and commissionsd. employee benefit planse. deposits by individualsf. taxes
5. infrequent6. two-thirds, more than one-half7. fraudulent, preferential8. realization and liquidation
9. False 14.
False 19. False 24. c 29.
b 34. b 39.
b
10.
False 15.
True 20.
False 25.
a 30.
b 35.
d 40.
c
11.
False 16.
True 21.
c 26.
d 31.
b 36.
b 41.
b
12.
True 17.
True 22.
a 27.
c 32.
a 37.
c 42.
a
13.
False 18.
True 23.
a 28.
e 33.
c 38.
a 43.
c
44. a 49. c 54. d 59.
a
45.
c 50.
d 55.
c 60.
c
46.
c 51.
a 56.
d
47.
a 52.
d 57.
b
48.
b 53.
b 58.
a