BV ABAKA has filed a petition for insolvency. The winding up of ABAKA Co.'s affairs will be entrusted to a receiver. The following information was gathered. Realizable value Assets 2,400,000 2,000,000 Liabilities Unsecured liabilities with priority 160,000 160,000 Fully secured creditors 960,000 960,000 Partially secured creditors 320,000 320,000 Unsecured liabilities without priorities 1,120,000 1,120,000 Total 2,560,000 2,560,000 Unrecorded items: Dividend receivables 40,000 Interest payable 16,000 Estimated administrative expenses 80,000 1 What is the estate equity (deficit) in the opening journal entry made by the receiver in its books? B on January 1, 2020, an entity sold a new car at a price of P1,300,000 with production cost of P1,170,000. At the time contract signing, the entity received P130,000 cash and old car as down payment. The entity gave a trade-in allowance of P390,000 to the old car although its fair market value on January 1, 2020 is P650,000. The remaining balance is payable in six equal monthly installments starting February 1, 2020. The buyer religiously paid the monthly installments starting February 1, 2020. However, on June 1, 2020, the buyer defaulted on the monthly installment due which is resulted to the cancellation of the contract of sale and repossession of the subject car. At the date of the repossession, the repossessed car was appraised at a fair value of P169,000. It is the policy of the entity to use installment method to account its credit sales. 1 What is the realized gross profit to be recognized by the entity for the year ended December 31, 2020? 2 What is the loss on repossession to be recognized by the entity for the year ended December 31, 2020? BV ABAKA has filed a petition for insolvency. The winding up of ABAKA Co.'s affairs will be entrusted to a receiver. The following information was gathered. Realizable value Assets 2,400,000 2,000,000 Liabilities Unsecured liabilities with priority 160,000 160,000 Fully secured creditors 960,000 960,000 Partially secured creditors 320,000 320,000 Unsecured liabilities without priorities 1,120,000 1,120,000 Total 2,560,000 2,560,000 Unrecorded items: Dividend receivables 40,000 Interest payable 16,000 Estimated administrative expenses 80,000 1 What is the estate equity (deficit) in the opening journal entry made by the receiver in its books? B on January 1, 2020, an entity sold a new car at a price of P1,300,000 with production cost of P1,170,000. At the time contract signing, the entity received P130,000 cash and old car as down payment. The entity gave a trade-in allowance of P390,000 to the old car although its fair market value on January 1, 2020 is P650,000. The remaining balance is payable in six equal monthly installments starting February 1, 2020. The buyer religiously paid the monthly installments starting February 1, 2020. However, on June 1, 2020, the buyer defaulted on the monthly installment due which is resulted to the cancellation of the contract of sale and repossession of the subject car. At the date of the repossession, the repossessed car was appraised at a fair value of P169,000. It is the policy of the entity to use installment method to account its credit sales. 1 What is the realized gross profit to be recognized by the entity for the year ended December 31, 2020? 2 What is the loss on repossession to be recognized by the entity for the year ended December 31, 2020
