Topic: Corporate Liquidation

need solutions please

Answers: 1.B 2.A 3.C 4.B 5.C

Problem 1: The ABC Corporation is undergoing liquidation and has the following condensed Statement of Financial Position as of January 1, 20X1: Assets Liabilities and Equity Cash P199,850 Salaries payable P87,500 Receivables (net) 596,400 Accounts payable 189,875 Merchandise 140,000 Bonds payable 700,000 Prepaid Expenses 4,375 Bank loan payable 385,000 Building (net) 603,750 Note payable 140,000 Goodwill 96,250 Ordinary shares 210,000Decit ! {1,750} P1 ,640,625 P1 ,640,625 The bonds payable is secured by the building having book value of P603,750 and a realizable value of P630900. Of the accounts payable, P105,000 is secured by '/4 of the receivable which is estimated to be 20% uncollectible. The remainder in the book value of the receivables which has a realizable value of P411,250 is used to secure the bank loan payable. The merchandise has a realizable value of P92,750. In addition to the recorded liabilities are accrued interest on bonds payable amounting to P7,000 and trustees expenses amounting to P4575 and taxes P5,250. 0 Compute for the settlement to secured creditors, partially secured creditors ad unsecured creditors. (percentage of recovery round off 4 decimal places} Secured Partially Secured Unsecured a. P490,000 P552,732 P236907 1:. 13494),ch 13690.199 P1753117 c. P504280 P690,199 P2361307 d P504280 P552,732 P175,807 Problem 2: The following information are related to DEF Corporation which is undergoing liquidation: A bank loan amounting to P227,500 is secured by inventories with book value of P262,500 and net realizable value of P175,000. Of the P560,000 accounts payable, P171,500 is secured by accounts receivable amounting to P206,500 which is 90% collectible. Property and equipment costing P437,500 and which is depreciated by 20% has a net realizable value of P294,000. Other unrecorded liabilities are accrued interest payable on bank loan, P22,750; salaries payable, P56,000; taxes payable, P31,500; and trustee's fee, P26,250. Cash available before liquidation amounts to P43,750. Compute for the estimated deficiency to unsecured creditors and expected recovery percentage of unsecured creditors. a. P225,400;51.40% c. P441,000;48.89% b. P463,750; 48.89% d. P490,000; 48.64%Problem 3: GHI Corporation has been undergoing liquidation since January 1. As of June 30, its condensed statement of realization and liquidation is presented below: Assets realized P525,000 Interest on investment 2,625 Purchases 26,250 Assets acquired 87,500 Liabilities assumed 26,250 Payment of expenses of trustee 131,250 Liabilities to be liquidated 1,137,500 Sales on account 87,500 Assets not realized 735,000 Liabilities not liquidated 557,375 Sales for cash 437,500 Assets to be realized 1,662,500 Liabilities liquidated 612,500 The net gain (loss) on realization and liquidation is: a. P306,250 b. (P306,250) c. (P126,000) d. P126,000Problem 4: The following data were taken from the statement of realization and liquidation of JKL Corporation for the quarter ended June 30, 20X1: Liabilities to be liquidated P285,000 Supplementary charges 169,100 Liabilities not liquidated 210,000 Supplementary credits 192,500 Assets acquired 136,000 Liabilities liquidated 158,000 Assets to be realized 107,500 Assets realized 175,000 Liabilities assumed 83,000 The beginning capital balances of ordinary shares and retained earnings are P102,000 and P29,600, respectively. A net income of P87,400 for the period. How much is the ending balance of cash? a. P293,000 b. P296,500 c. P209,100 d. P309,100Problem 5: The following information are related to Santra Corporation which is undergoing liquidation: a. Bonds payable amounting to P73,600 is secured by merchandise inventory with book value of P123,000 and net realizable value of 2/3 of the recorded amount. b. Of the P195,600 accounts payable, P55,000 is secured by equipment with a carrying amount of P76,800 which is 70% realizable. c. Building with a carrying amount of P129,000 has a net realizable value of P99,000. d. Other unrecorded liabilities are accrued interest payable on bonds, P3,100; salaries payable, P17,400; taxes payable, P11,600; and trustee's fee, P8,500. e. Cash available prior to liquidation amounts to P11,900. f. Total assets of Santra Corporation presented in the statement of financial position prior to liquidation amounts to P480,000, except for prepaid expenses and goodwill with recorded amounts of P7,600 and P22,000, respectively, remaining assets other than those whose realizable values were mentioned above have a realizable value of 60% of the recorded amount. g. Total liabilities of Santra Corporation presented in the statement of financial position prior to liquidation amounts to P380,000. Compute for the estimated deficiency to unsecured liabilities. a. P51,696 b. 120,020 c. P108,120 d. P67,520