question archive When Philex Company filed for liquidation with the Securities and Exchange Commission, it prepared the following balance sheet
When Philex Company filed for liquidation with the Securities and Exchange Commission, it prepared the following balance sheet
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When Philex Company filed for liquidation with the Securities and Exchange Commission, it prepared the following balance sheet.
Current assets, net realizable value, P50,000 P 80,000
Land and buildings, fair value, P240,000) 200,000
Goodwill, fair value, P0 40,000
Total assets P 320,000
Accounts payable P 160,000
Mortgage payable, secured by land and building 200,000
Common stock 100,000
Retained earnings, deficit ( 140,000)
Total equities P 320,000
What is the estimated deficiency to unsecured creditors?
a. P120,000
b. P 90,000
c. P140,000
d. P 70,000
What percentage of their claims are the unsecured creditors likely to get?
a. 43.75%
b. 56.25%
c. 100.00%
d. 50.00%
I. Vina Co. has been forced into bankruptcy and liquidated. Unsecured claims will be paid at the rate of P0.50 on the peso. Jigs Co. hold a non-interest bearing note receivable from Vina Co. in the amount of P50,000 collateralized by machinery with a liquidation value of P10,000.
The total amount to be realized by Jigs on this note receivable is:
a. P25,000
b. P10,000
c. P35,000
d. P30,000
II. REH Co. filled a voluntary bankruptcy petition on August 15, 2014 and the statement of affairs reflect the following amounts:
Assets pledge with fully secure creditors
Assets pledge with partially secured creditors
Free Assess
Liabilities with priority
Fully secured creditors
Partially secured creditors
Unsecured creditors
BOOK CARRYING VALUE
P 150,000
90,000
210,000
P 450,000
Liabilities
P 35,000
130,000
100,000
270,000
P 535,000
ESTIMATED CURRENT VALUE
P 185,000
60,000
160,000
P 405,000
Assumes that the assets are converted into cash at the estimated current value and the business is liquidated. How much cash will be available to pay the unsecured non-priority claims?
a. P160,000
b. P125,000
c. P180,000
d. P240,000
III. The Metro Bank loaned P40,000 to Ilocano Company. The loan is secured by inventory with a book value and fair value of P50,000 and P30,000, respectively. What amount will the bank receive if unsecured creditors receive 25% of their claims?
a. 40,000
b. 30,000
c. 10,000
d. 32,500
IV. The Abra Company owes P200,000 on a note payable plus P8,000 in interest to its bank. The note is secured by inventory with a book value of P160,000 and a fair value of P120,000. What amount will the bank receive if unsecured creditors receive 75% of their claims?
a. 180,000
b. 120,000
c. 186,000
d. 160,000
V. The Red Company owes P15,000,000 on the mortgage of its building to City Bank. The building has a net book value of P20,000,000 and a fair value of P18,000,000. When Red company filed for liquidation, it owed interest of P90,000; when the building is sold for P18,000,000, the interest due on the mortgage is P200,000. What amount will the bank receive if the unsecured creditors received 80% of their claims?
a. 15,200,000
b. 15,178,000
c. 15,160,000
d. 15,000,000
VI. A company is to be liquidated and has the following liabilities:
Income taxes
8,000
Notes payable (secured by land)
120,000
Accounts payable
83,000
Salary payable (evenly to two employees)
6,000
Bonds payable
70,000
Administrative expenses for liquidation
20,000
The company has the following assets:
Book value
Fair value
Current assets
80,000
33,000
Land
100,000
90,000
Building and equipment
100,000
110,000
How much will the holders of notes payable collect following the liquidation?
a. 108,000
b. 83,000
c. 90,000
d. 120,000
VII. Cebuano company has had severe financial difficulties and is considering the possibility of liquidation. At this time, the company has the following assets (stated at net realizable value) and liabilities.
Assets (pledged against debts of P70,000)
116,000
Assets (pledged against debts of P130,000)
50,000
Other assets
80,000
Liabilities with priority
42,000
Unsecured creditors
200,000
In liquidation, how much would be paid to the partially secured creditors?
a. 50,000
b. 130,000
c. 74,000
d. 200,000
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