Use the following information for the next four questions:

Arenba Co.'s financial position before the start of its liquidation is as follows:

ASSETSLIABILITIES AND EQUITY

Cash100,000Accounts payable1,600,000

Accounts receivable600,000Income tax payable900,000

Inventory1,560,000Note payable (secured by equipment)1,000,000

Land800,000Loan payable (secured by land & bldg.)1,200,000

Building1,200,000Share capital2,000,000

Equipment, net400,000Retained earnings (deficit)(2,040,000)

Total4,660,0004,660,000

Additional information:

a. Only 60% of the accounts receivable is collectible.

b. The entire inventory is expected to be sold half the price.

c. The land and building are expected to be sold at a lump sum price of P230,000.

d. The equipment is expected to be sold at its carrying amount but after refurbishment costs of P70,000.

e. Certain accounts payable are measured gross of P23,000 cash discount which Arenba intends to take. A supplier waived repayment of a P420,000 account.

f. The taxing authority gave Arenba a six-month tax amnesty to settle the tax liability for P78,000.

g. Interests of P80,000 and P70,000 are expected to be paid on the note and loan, respectively.

h. Liquidation costs of P120,000 are expected to be incurred.

i. SSS, PhilHealth, and Pag-IBIG contributions of P160,000, not reflected on the balance sheet above, are expected to be paid.

Questions:

1. How much is the estimated deficiency to unsecured creditors without priority?

2. How much are the net free assets?

3. How much total amount can the issuer on the note payable expect to receive?

4. Mr. A, an unsecured creditor without priority, has a claim of P80,000. How much can Mr. A expect to recover on his claim?

The next two questions are based on the following information:

StartCo. is undergoing liquidation. The statement of affairs shows the following information.

ASSETSCarrying amountRealizable value

Assets pledged to fully secured creditors160,000190,000

Assets pledged to partially secured creditors90,00060,000

Free assets 200,000140,000

450,000 390,000

LIABILITIES

Liabilities with priority20,00020,000

Fully secured creditors130,000130,000

Partially secured creditors100,000100,000

Unsecured creditors260,000 260,000

510,000510,000

5. If all the assets were sold at their realizable values and all the liabilities were settled at their expected settlement amounts, how much will the partially secured creditors receive?

6. If all the assets were sold at their realizable values and all the liabilities were settled at their expected settlement amounts, how much will the unsecured creditors receive?

7. Carrie Co.'s statement of affairs shows a 65% expected recovery of unsecured creditors without priority, which consists of accounts payable with carrying amount of P800,000. The accountant's working papers show the following:

SuppliersBalancesNotes

TinaCo.600,000Waived repayment of P100,000

Rile Co.80,000To be cancelled upon return of the goods

Nai Co.120,000Rebate of P50,000 is available

Total800,000

How much are the net free assets?

Use the following information for the next three questions:

WeedCo.'s financial position before its liquidation is as follows:

ASSETSLIABILITIES AND EQUITY

Cash100,000Accounts payable1,600,000

Accounts receivable600,000Loan payable1500,000

Inventory900,000Share capital2,000,000

Equipment, net400,000Retained earnings (deficit) (3,100,000)

Total2,000,000Total2,000,000

Transactions in the first quarter of liquidation are as follows:

a. 90% of the accounts receivable were collected. Commission of third party collectors amounted to P108,000. The collectors expect to collect remaining receivables in the next quarter.

b. Half of the inventory was sold at 80% of carrying amount. The other half is expected to be sold at 60% of carrying amount.

c. The equipment was sold for P380,000 after it was refurbished for P50,000.

d. P100,000 accounts payable were paid.

e. Employee termination benefits of P100,000 were recorded and P80,000 of that amount were paid.

f. The lender accepted P1,000,000 as full payment of the loan.

g. Liquidation costs of P50,000 were paid.

h. Scrap materials from clearing the warehouse were sold for P10,000.

8. How much "assets realized" is presented on Weed's statement of realization and liquidation?

9. How much net gain (loss) is reported on Weed's statement of realization and liquidation?

10. How much is the ending balance of cash?

Compute the following in excel form: