Troublesome Corporation filed a petition for voluntary liquidation and was approved by the court on October 1, 2020 You are now hired by the appointed liquidator to assist him in determining the amount of payout to creditors You obtained the following information Book Value Estimated Realizable Value Cash P 40,000 P 40,000 Accounts receivable net 240,000 200,000 Inventory 4400,000 280,000 Equipment net 280,000 280,000 Land 80,000 160,000 Building net 800,000 600,000 Goodwill 168,000 P 2,048,000 Accounts payable P 480,000 Wages and salaries payable 120,000 Pension plan payable 80,000 Taxes payable 320,000 Interest payable 48,000 Note payable 400,000 Mortgage payable 400,000 Share capital 280,000 Deficit ( 80,000 ) P 2,048,000 Interest payable includes P40,000 from the mortgage payable and P8,000 from the note payable The land and building are pledged as security for the mortgage payable as well as any accrued interest on the mortgage The note payable is secured with the equipment, but the interest on the note is unsecured Liquidation expenses are expected to be P200,000 Required a Make statement of affairs as of October 1, 2020 b Compute the estimated recovery ratio c Handsome Corporation was a supplier to Troublesome Corporation and at the time of Troublesome's liquidation filing, Handsome's account receivable from Troublesome was P160,000 On the basis of the estimates, how much can Handsome expect to receive

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 28, 2024

Troublesome Corporation filed a petition for voluntary liquidation and was approved by the court on October 1, 2020.You are now hired by the appointed liquidator

Troublesome Corporation filed a petition for voluntary liquidation and was approved by the court on October 1, 2020.You are now hired by the appointed liquidator to assist him in determining the amount of payout to creditors.You obtained the following information.

Book Value

Estimated

Realizable

Value

Cash

40,000

Accounts receivable-net

240,000

200,000

Inventory

4400,000

280,000

Equipment-net

280,000

Land

80,000

160,000

Building-net

800,000

600,000

Goodwill

168,000

2,048,000

Accounts payable

480,000

Wages and salaries payable

120,000

Pension plan payable

80,000

Taxes payable

320,000

Interest payable

48,000

Note payable

400,000

Mortgage payable

400,000

Share capital

280,000

Deficit

(

80,000

)

2,048,000

Interest payable includes P40,000 from the mortgage payable and P8,000 from the note payable.The land and building are pledged as security for the mortgage payable as well as any accrued interest on the mortgage. The note payable is secured with the equipment, but the interest on the note is unsecured. Liquidation expenses are expected to be P200,000.

Required:

a.Make statement of affairs as of October 1, 2020.

b.Compute the estimated recovery ratio.

c.Handsome Corporation was a supplier to Troublesome Corporation and at the time of Troublesome's liquidation filing, Handsome's account receivable from Troublesome was P160,000.On the basis of the estimates, how much can Handsome expect to receive?