Question
[HELP PLEASE] CASE #1: Lugi Ka Na Company has been forced into bankruptcy as of April 30 because of its inability to pay its debts.
[HELP PLEASE]
CASE #1:
Lugi Ka Na Company has been forced into bankruptcy as of April 30 because of its inability to pay its debts. The statement of financial position on that date shows:
ASSETS | LIABILITIES & EQUITY | |||
Cash | 5,400 | Accounts Payable | 105,000 | |
Accounts Receivable | 78,700 | Notes Payable - PNB | 30,000 | |
Note Receivable | 37,000 | Notes Payable - suppliers | 102,500 | |
Inventory | 175,700 | Accrued wages | 3,700 | |
Prepaid Expenses | 1,900 | Accrued taxes | 9,300 | |
Land and Building | 122,500 | Mortgage Bonds Payable | 180,000 | |
Equipment, net | 97,600 | Common Stock - P100 par | 150,000 | |
Retained earnings | (61,700) | |||
Total Assets | 518,800 | Total Liabilities & Equity | 518,800 |
Additional Information:
a. Accounts receivable of P32,220 and notes receivable of P25,000 are expected to be collectible. The good notes are pledged to Philippine National Bank.
b. Inventories are expected to bring in P90,200 when sold under bankruptcy conditions.
c. Land and buildings have an appraised value of P190,000. They serve as security on the bonds.
d. The current value of the equipment, net of disposal cost is P18,000.
e. Estimated legal and accounting fees for the liquidation are P2,000.
f. Unrecorded interest on notes payable to supplier amounts to P1,000.
Using the above data, compute the following:
- Total free assets
- Net free assets
- Unsecured liabilities with priority
- Unsecured liabilities without priority
- Estimated recovery percentage
- Net gain (loss) on realization
- Estimated deficiency
- Net income (loss) on realization liquidation
- Amount paid to partially secured creditors
- Amount paid to unsecured creditors without priority
- Total estimated payment to creditors
- To payment to unsecured creditors
CASE #2:
The following data were taken from the statement of realization and liquidation of Bagsak Corporation for the three-month period ended December 31:
Assets to be realized | 220,000 | liabilities assumed | 120,000 | |
assets acquired | 240,000 | liabilities liquidated | 240,000 | |
assets realized | 280,000 | liabilities not liquidated | 300,000 | |
assets not realized | 100,000 | supplementary credits | 340,000 | |
liabilities to be liquidated | 360,000 | supplementary charges | 312,000 |
Based on the above data, compute the following:
- Net income (loss) for the period
- Gain (loss) on realization
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