Requirements: A. Determine the total payment to unsecured creditors. B. Determine the total net free assets. Present the solutions. A company that was to be liquidated had the following liabilities:10,000100,000251,050Income TaxesNotes Payable secured by landAccounts PayableSalaries PayableAdministrative expenses for liquidation12,95020,000The company had the following assets:BookFairValueValue100,00050,000150,000Current assets95,00075,000200,000LandBuilding

Liquidation means where the company decide to close out the operations , sell all the assets and…

Answered: Requirements: A. Determine the total…

Requirements: A. Determine the total payment to unsecured creditors. B. Determine the total net free assets. Present the solutions.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Pitch Co. is undergoing liquidation. Infórmation on Pitch Co.. assets and liabilities is shown below: Вook value Realizable value ASSETS 1,000,000 500,000 1,300,000 Assets pledged to fully secured creditors Assets pledged to partially secured creditors 300,000 1,600,000 1,280,000 Free assets 3,100,000 2,880,000 LIABILITIES Unsecured liabilities with priority 400,000 480,000 1,000,000 1,050,000 Fully secured creditors Partially secured creditors Unsecured creditors without priority 650,000 650,000 1,400,000 3,580,000 1,400,000 3,450,000 1. What is the estimated recovery percentage of unsecured creditors without priority? а. 60% b. 75% с. 78% d. 80%
Accounting The Statement of Realization and Liquidation for NMCC Corporation is as follows:▪Assets to be realized P 720,000▪Assets acquired 480,000▪Assets realized 660,000▪Assets not realized ?▪Liabilities to be liquidated 960,000▪Liabilities liquidated 840,000▪Liabilities assumed 600,000▪Liabilities not liquidated 1,320,000▪Supplementary credits 1,320,000▪Supplementary debits 1,260,000 Retained earnings decreased by P 144,000. The ending balance of common stock and retained earnings are P1,200,000 and (P900,000) respectively. 1. The beginning balance of cash is:2. The ending balance of cash is:
Accounting The Statement of Realization and Liquidation for NMCC Corporation is as follows:▪Assets to be realized P 720,000▪Assets acquired 480,000▪Assets realized 660,000▪Assets not realized ?▪Liabilities to be liquidated 960,000▪Liabilities liquidated 840,000▪Liabilities assumed 600,000▪Liabilities not liquidated 1,320,000▪Supplementary credits 1,320,000▪Supplementary debits 1,260,000 Retained earnings decreased by P 144,000. The ending balance of common stock and retained earnings are P1,200,000 and (P900,000) respectively. Requirements: 1. The amount of Assets not realized is:2. The amount of Net Income or (Net Loss) is:
The statement of realization and liquidation of ABC Corp are as follows: Assets to be realized P1,800,000 Assets acquired 300,000 Assets realized 1,100,000 Assets not realized 1,200,000 Liabilities liquidated 1,600,000 Liabilities not liquidated P1,400,000 Liabilities assumed 1,500,000 Liabilities to be liquidated 2,000,000 Supplementary credits 1,950,000 Supplementary charges 2,500,000 Additional ordinary shares issued for cash during the year totaled P500,000. What is the ending balance of cash account assuming that Ordinary Share, beginning is P1,500,000 and deficit, ending is P400,000?
The Walston Company is to be liquidated. It has the following liabilities: Income taxes Notes payable (secured by land) Accounts payable Salaries payable (evenly divided between two employees) Bonds payable Administrative expenses for liquidation The company has the following assets: $ 7,600 136,000 93,000 14,000 78,000 28,000 Book Value Fair Value Current assets $ 88,000 Land 108,000 Buildings and equipment 108,000 $ 43,000 98,000 132,000 Required: How much money will the holders of the notes payable collect following liquidation? Total amount collected
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) Land and Building (fair value, P240,000) Goodwill (fair value, 0) Total Assets Accounts Payable Mortgage Payable (secured by land & building) Ordinary share Accumulated profits Total Liabilities and Equity b. 56.25% c. 50.00% P 80,000 200,000 d. 43.75% 40,000 P320,000 P160,000 200,000 100,000 What percentage of their claims are the unsecured creditors likely to get? a. 100% (140,000) P320,000
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) Land and Building (fair value, P240,000) Goodwill (fair value, 0) P 80,000 200,000 40,000 Total Assets P320,000 P160,000 Accounts Payable Mortgage Payable (secured by land & building) 200,000 Ordinary share Accumulated profits Total Liabilities and Equity 100,000 (140,000) P320,000 What percentage of their claims are the unsecured creditors likely to get? O 56.25% 50.00% O 100% 43.75%
The statement of realization and liquidation of Honesty Co. are as follows: P1,700,000 Liabilities not liquidated Liabilities assumed Assets to be realized Assets acquired Assets realized Assets not realized Liabilities liquidated 300,000 1,100,000 1,200,000 1,600,000 Liabilities to be liquidated Supplementary charges Supplementary credits P1,400,000 1,500,000 2,000,000 2,500,000 1,950,000 What is the beginning balance of cash account assuming that Ordinary Share Capital is P1,500,000 and deficit, ending is P400,000?
S Company had the following balances at the time it was acquired by P Company:Cash P36,000Accounts receivable 457,000Inventories 120,000Property, plant and equipment 696,400Goodwill 200,000Accounts payable 350,800P Company paid P1.4M for the net assets of S Company. It was determined that fair market values of inventories and property, plant and equipment were P133,000 and P900,000, respectively.An assumed contingent liability with a fair value amounting to P20,000 and such amount is considered a reliable measurement. Also, a P50,000 future losses or reorganization/ restructuring costs are expected to be incurred as a result of the business combination.In the books of P Company, how will be the amount of Goodwill arising from business combination?
9. RGW Industries purchased the net assets of SP Company for P1,300,000. A schedule of the net assets of SP Company, as recorded on SP Company's books at the time of the acquisition, is as follows: Assets Cash Receivable Inventory Land, buildings, and equipment (net) Total assets Liabilities Current liabilities Long-term debt P31,000 250,000 302,000 350,000 P933,000 Inventory Land, building and equipment Patent P90,000 185,000 P275,000 P658,000 Total liabilities Net assets (book value) The following schedule shows the differences between the recorded costs and market values of the assets of SP Company at the date of the acquisition: Cost P302,000 350,000 0 Purchased in-process research and development Existing workforce Totals P652,000 P275,000 Liabilities Determine the amount of goodwill to be recognized on the acquisition? a. P642,000 c. P74,000 b. P464,000 d. P164,000 0 0 Market P400,000 390,000 40,000 300,000 90,000 P1,220,000 P275,000
The following information was taken from the statement of realization and liquidation of Jury and John Bombastix Co. which is undergoing liquidation: ASSETS: 8,000,000 60,000 4,720,000 880,000 Assets to be realized Assets acquired Assets realized Assets not realized LIABILITIES: Liabilities liquidated Liabilities not liquidated Liabilities to be liquidated 8,520,000 4,760,000 11,480,000 128,000 Liabilities assumed SUPPLEMENTARY ITEMS: Supplementary expenses Supplementary income 100,000 72,000 How much is the net gain (loss) for the period?
Show the solution in good accounting form Orange Company’s ledger revealed the following account balances as of December 31, 2020: Unamortized discount on bonds payable P120,000; Organization costs P100,000; Losses in early years of company P450,000; Trademarks P750,000 Patents P150,000; Amount set up by BOD as goodwill P300,000. How much should be presented as intangible assets shown In the statement of financial position?