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3. Mr. A has a P36 loan receivable from Green Corp. The loan is secured by an asset with a carrying amount of P40. Mr. A can expect payment of P18 on the loan. 4. Mr. B has a P15 note receivable from Green Corp. The note is secured by an asset with a carrying amount of P20. Mr. B can expect payment of P11 on the note. 5. You are a major shareholder of Green Corp. You own 80 out of the 100 outstanding ordinary shares with P1 par value per share. You can expect to recover nothing on the liquidation or Green Corp.

3. Mr. A has a P36 loan receivable from Green Corp. The loan is secured by an asset with a carrying amount of P40. Mr. A can expect payment of P18 on the loan. 4. Mr. B has a P15 note receivable from Green Corp. The note is secured by an asset with a carrying amount of P20. Mr. B can expect payment of P11 on the note. 5. You are a major shareholder of Green Corp. You own 80 out of the 100 outstanding ordinary shares with P1 par value per share. You can expect to recover nothing on the liquidation or Green Corp.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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3, 4, 5 only. Indicate if TRUE or FALSE

The assets are expected to be realized at an average of 75% of Fact pattern: one-fourth represents secured and priority claims. 1. The "net free assets" are P75. 2. Unsecured non-priority creditors would expect to recove only one-third (1/3) of their claim. 3. Mr. A has a P36 loan receivable from Green Corp. The loan is secured by an asset with a carrying amount of P40. Mr. A can expect payment of P18 on the loan. 4. Mr. B has a P15 note receivable from Green Corp. The note is secured by an asset with a carrying amount of P20. Mr. B can expect payment of P11 on the note. 5. You are a major shareholder of Green Corp. You own 80 out of the 100 outstanding ordinary shares with P1 par value per share. You can expect to recover nothing on the liquidation ot Green Corp.
Transcribed Image Text:The assets are expected to be realized at an average of 75% of Fact pattern: one-fourth represents secured and priority claims. 1. The "net free assets" are P75. 2. Unsecured non-priority creditors would expect to recove only one-third (1/3) of their claim. 3. Mr. A has a P36 loan receivable from Green Corp. The loan is secured by an asset with a carrying amount of P40. Mr. A can expect payment of P18 on the loan. 4. Mr. B has a P15 note receivable from Green Corp. The note is secured by an asset with a carrying amount of P20. Mr. B can expect payment of P11 on the note. 5. You are a major shareholder of Green Corp. You own 80 out of the 100 outstanding ordinary shares with P1 par value per share. You can expect to recover nothing on the liquidation ot Green Corp.
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