This is under Corp Liquidation and Reorganization expect to collect the remaining receivahles in the next quarter.third party collectors amounted to P108,000. The collectors• 90% of the accounts receivable were collected. Commission ofRainy Co.'s financial position before its liquidation is as follows:ASSETSLIABILITIES AND EQUITYCash100,000 Accounts payable600,000 Loan payable900,000 Share capital400,000 Retained earnings (deficit)2,000,000 Total1,600,0001,500,0002,000,000Accounts receivableInventoryEquipment; net(3,100,000)2,000,000TotalTransactions in the first quarter of liquidation are as follows: Half of the inventory was sSold at 80% of carrying amount. Theather half is expected to be sold at 60% of carrying amount.The equipment was sold for P380,000 after it was refurbishedfor P50,000.P100,000 accounts payable were paid. The balance remainsoutstanding.Employee termination benefits of P100,000 were recorded andP80,000 of that amount were paid.The lender accepted P1,000,000 as full payment of the loan.Liquidation costs of P50,000 were paid.Scrap materials from clearing the warehouse were sold forP10,000.10. How much is the ending balance of the "estate deficit"account?a. 978,000b. 1,008,000c. 987,000d. 1,122,000

Correct option is D. 1,122,000 Explanation:

• 90% of the accounts receivable were collected. Commission of Rainy Co.'s financial position before its liquidation is as follows: ASSETS LIABILITIES AND EQUITY Cash 100,000 Accounts payable 600,000 Loan payable 900,000 Share capital 400,000 Retained earnings (deficit) 2,000,000 Total 1,600,000 Accounts receivable 1,500,000 Inventory Equipment; net 2,000,000 (3,100,000) 2,000,000 Total Transactions in the first quarter of liquidation are as follows: third narty colloo lloctors

• 90% of the accounts receivable were collected. Commission of Rainy Co.'s financial position before its liquidation is as follows: ASSETS LIABILITIES AND EQUITY Cash 100,000 Accounts payable 600,000 Loan payable 900,000 Share capital 400,000 Retained earnings (deficit) 2,000,000 Total 1,600,000 Accounts receivable 1,500,000 Inventory Equipment; net 2,000,000 (3,100,000) 2,000,000 Total Transactions in the first quarter of liquidation are as follows: third narty colloo lloctors

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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