37) Because of inability to pay its debts, the Lou Gi Manufacturing Company has been forced into bankruptcy as of April 1, 20x7. The

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37) Because of inability to pay its debts, the Lou Gi Manufacturing Company has been forced into bankruptcy as of April 1, 20x7. The balance sheet on the date shows: Assets Cash Accounts Receivable Notes Receivable Merchandise Invty. Prepaid Insurance Land and Buildings Equipment Total P 2,700Accounts Payable Liabilities & Equity 39,350Notes Payable- Bank 18,500Notes Payable- Suppliers Additional information: 87,850Accrued Wages 950Accrued Taxes P259,400 Total 61,250Mortgage Bonds Payable 48,800Common Stock- P100 par Retained Earnings P 52,500 15,000 51,250 1,850 4,650 90,000 75,000 (30,850) P259,400 Accounts receivable of P16,950 and notes receivable of P12,500 are expected to be collectible. The good notes are pledged to the bank. Merchandise inventory are expected to bring in P45,100 when sold under bankruptcy conditions. Land and buildings have an appraised value of P95,000. They serve as security on the bonds. The current value of the equipment, net of disposal cost is P9,000. The estimated net loss/net gain on asset disposal is: a. P111,900 b. P78,150 c. P77,200 d. P33,750