7. Paramount Co.'s statement of affairs shows net free assets ofP520,000 (at realizable value) and unsecured liabilities withoutpriority of P800,000 (at carrying amount). The accountantsworking papers show the following:SuppliersBalancesNotes600,000Waived repayment of P100,000To be cancelled upon return of the goodsRebate of P50,000 is availableAthena Co.Riley Co.Naia Co.80,000120,000800,000TotalWhat is the estimated recovery percentage of unsecured creditorswithout priority?а. 65%b. 75%с. 80%d. 0%

solution : total realizable value of net free assets = 520000 calculation of unsecured liabilities…

7. Paramount Co.'s statement of affairs shows net free asset- P520,000 (at realizable value) and unsecured liabilities with priority of P800,000 (at carrying amount). The accounta working papers show the following: Suppliers Balances Notes Athena Co. 600,000 80,000 120,000 Waived repayment of P100,000 To be cancelled upon return of the ga Riley Co. Naia Co. Rebate of P50,000 is available Total 800.000

7. Paramount Co.'s statement of affairs shows net free asset- P520,000 (at realizable value) and unsecured liabilities with priority of P800,000 (at carrying amount). The accounta working papers show the following: Suppliers Balances Notes Athena Co. 600,000 80,000 120,000 Waived repayment of P100,000 To be cancelled upon return of the ga Riley Co. Naia Co. Rebate of P50,000 is available Total 800.000

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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Question

7. Paramount Co.'s statement of affairs shows net free assets of
P520,000 (at realizable value) and unsecured liabilities without
priority of P800,000 (at carrying amount). The accountants
working papers show the following:
Suppliers
Balances
Notes
600,000
Waived repayment of P100,000
To be cancelled upon return of the goods
Rebate of P50,000 is available
Athena Co.
Riley Co.
Naia Co.
80,000
120,000
800,000
Total
What is the estimated recovery percentage of unsecured creditors
without priority?
а. 65%
b. 75%
с. 80%
d. 0%

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