A statement of financial affairs created for an insolvent corporation that is beginning the process of liquidation discloses the following data. The assets are shown at net realizable values. Assets pledged with fully secured creditors Fully secured liabilities Assets pledged with partially secured creditors Partially secured liabilities Assets not pledged Unsecured liabilities with priority Accounts payable (unsecured) $ 238,000 169,000 399,000 528,000 319,000 199,700 409,000 The company owes $22,000 on an account payable to an unsecured creditor (without priority). How much money can this creditor expect to collect? The company owes $138,000 to a bank on a note payable that is secured by a security interest attached to property with an estimated net realizable value of $99,000. How much money can the bank expect to collect?

A statement of financial affairs created for an insolvent corporation that is beginning the process of liquidation discloses the following data. The assets are shown at net realizable values. Assets pledged with fully secured creditors Fully secured liabilities Assets pledged with partially secured creditors Partially secured liabilities Assets not pledged Unsecured liabilities with priority Accounts payable (unsecured) $ 238,000 169,000 399,000 528,000 319,000 199,700 409,000 The company owes $22,000 on an account payable to an unsecured creditor (without priority). How much money can this creditor expect to collect? The company owes $138,000 to a bank on a note payable that is secured by a security interest attached to property with an estimated net realizable value of $99,000. How much money can the bank expect to collect?

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter6: Audit Evidence

Section: Chapter Questions

Problem 15CYBK

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Mondesto Company has the following debts: Unsecured creditors Liabilities with priority Secured liabilities: Debt 1, $246,000; value of pledged asset Debt 2, $206,000; value of pledged asset Debt 3, $138,000; value of pledged asset $ 248,000 128,000 Selling value of free assets 198,000 118,000 176,000 The company also has a number of other assets that are not pledged in any way. The creditors holding Debt 2 want to receive at least $170,800. For how much do the free assets have to be sold so that the creditors associated with Debt 2 will receive exactly $170,800?
A statement of financial affairs created for an insolventcorporation that is beginning the process of liquidation disclosesthe following data (assets are shown at net realizable values): Assets pledged withfully secured creditors $ 220,000 Fully securedliabilities 160,000 Assets pledged withpartially secured creditors 390,000 Partially securedliabilities 510,000 Assets notpledged 310,000 Unsecuredliabilities with priority 182,800 Accounts payable(unsecured) 400,000 a. This company owes $13,000 to an unsecured creditor (withoutpriority). How much money can this creditor expect to collect? b. This company owes $120,000 to a bank on a note payable that issecured by a security interest attached to property with anestimated net realizable value of $90,000. How much money can thisbank expect to collect?
A statement of financial affairs created for an insolvent corporation that is beginning the process of liquidation discloses the following data. The assets are shown at net realizable values. Assets pledged with fully secured creditors $ 212,000 Fully secured liabilities 156,000 Assets pledged with partially secured creditors 386,000 Partially secured liabilities 502,000 Assets not pledged 306,000 Unsecured liabilities with priority 208,400 Accounts payable (unsecured) 396,000 The company owes $9,000 on an account payable to an unsecured creditor (without priority). How much money can this creditor expect to collect? The company owes $112,000 to a bank on a note payable that is secured by a security interest attached to property with an estimated net realizable value of $86,000. How much money can the bank expect to collect? a. Expected amount by creditor b. Expected amount by bank
What is the amount received by partially secured creditors?
PROBLEMS 1. The following information was taken from the Statement of affairs filed by LIQUIDATED Corporation to the bankruptcy court on July 31, 2014: LIQUIDATED Corporation Statement of Affairs July 31, 2014 Book value Assets Realizable Values- Liability Offsets for Secured Creditors Realizable values Available for Unsecured Creditors Pledge for Fully Secured Creditors Machineries and Equipment – net Less: Mortgage payable Interest payable Pledge for Priority and Secured Creditors Merchandise Inventory Less: Notes payable to bank Interest payable Available for Priority and Unsecured Creditors P750, 000 P600, 000 P500, 000 50. 000 550. 000 P50, 000 375, 000 P290, 000 P 300, 000 30, 000 330, 000 10, 800 150, 000 220, 000 2, 200 Cash 10, 800 91, 200 250, 000 Accounts Receivable Land Intangible assets Total available for priority and unsecured Creditors 402, 000 132. 250 269, 750 145, 250 P415. 000 Less: Priority liabilities Total available for unsecured creditors Estimated deficiency…
A statement of realization and liquidation has been prepared for the RESTLESS Corporation. The following information is available:Assets to be realized- P60,000 Liabilities assumed- P50,000Assets acquired- P40,000 Liabilities not liquidated- P40,000Assets realized- P55,000 Liabilities to be Liquidated- P80,000Assets not realized- P15,000 Liabilities liquidated- P60,000Supplementary credits- P110,000 Supplementary Charges- P97,000How much is the net increase (decrease) in retained earnings?
A statement of realization and liquidation has been prepared for the RESTLESS Corporation. The following information is available:Assets to be realized- P60,000 Liabilities assumed- P50,000Assets acquired- P40,000 Liabilities not liquidated- P40,000Assets realized- P55,000 Liabilities to be Liquidated- P80,000Assets not realized- P15,000 Liabilities liquidated- P60,000Supplementary credits- P110,000 Supplementary Charges- P97,000How much is shareholders’ equity, beg. assuming that the cash balance, ending amounted to P50,000? a. P118,000 b. P12,000 c. P92,000 d. P55,000
A statement of realization and liquidation has been prepared for the RESTLESS Corporation. The following information is available:Assets to be realized- P60,000 Liabilities assumed- P50,000Assets acquired- P40,000 Liabilities not liquidated- P40,000Assets realized- P55,000 Liabilities to be Liquidated- P80,000Assets not realized- P15,000 Liabilities liquidated- P60,000Supplementary credits- P110,000 Supplementary Charges- P97,000How much is shareholders’ equity, beg. assuming that the cash balance, ending amounted to P50,000? CHOICES: P92,000 P55,000 P118,000 P12,000
Pitch Co. is undergoing liquidation. Information on Pitch Co. assets and liabilities is shown below: Вook value Realizable value ASSETS 1,000,000 1,300,000 Assets pledged to fully secured creditors Assets pledged to partially secured creditors 500,000 300,000 1,280,000 1,600,000 3,100,000 Free assets 2,880,000 LIABILITIES 400,000 480,000 Unsecured liabilities with priority Fully secured creditors Partially secured creditors Unsecured creditors without priority 1,000,000 1,050,000 650,000 650,000 1,400,000 3,580,000 1,400,000 3,450,000 2. How much can the "partially secured creditors" expect to recover from their claims? а. 432,000 b. 445,600 c. 510,000 d. 548,000
ABC Co. is undergoing liquidation. Information on ABC Co.'s assets and liabilities is shown below: ASSETS Book value Realizable value Assets pledged to fully secured creditors Assets pledged to partially secured creditors 360,000 480,000 208,000 192,000 Free assets 600,000 576,000 1,168,000 1,248,000 LIABILITIES Unsecured liabilities with priority Fully secured creditors Partially secured creditors Unsecured creditors without priority 288,000 288,000 384,000 240,000 432,000 384,000 240,000 432,000 1,344,000 1,344,000 How much can the partially secured creditors expect to recover from their claims?
Problem No. 5 DAP Company started operation on January 1, 2018 and acquired the following securities: Trading Securities Portfolio Abad Company Aquino Company Lacierda Company Fair value P2,400,000 2,600,000 1,900,000 Fair value FVTOCI Portfolio Coloma Company Soliman Company Villanueva Company P3,050,000 2,725,000 1,875,000 No disposals were made during 2018. The fair values of the investment securities as of December 31, 2018 are as follows: Trading Securities Portfolio Abad Company Aquino Company Lacierda Company Fair value P2,380,000 2,600,000 1,870,000 Page |S/TOCI Portfolio Coloma Company Soliman Company Villanueva Company Fair value P3,070,000 2,737,500 1,871,000 The following additional transactions happened in 2019: On September 1, DAP Company sold its Aquino Company securities for P2,590,000. On October 1, DAP Company exchanged it Soliman Company portfolio for a piece of land. The carrying amount of the land was P1,937,500 an a zonal value of P2,777,500. At the time of…
When AAA Company filed for liquidation with the Securities and Exchange Commission, it prepared the following statement of financial position: Current Assets (net realizable value, P50,000) Land and Building (fair value, P240,000) Goodwill (fair value, 0) Total Assets Accounts Payable Mortgage Payable (secured by land & building) Ordinary share Accumulated profits Total Liabilities and Equity b. 56.25% c. 50.00% P 80,000 200,000 d. 43.75% 40,000 P320,000 P160,000 200,000 100,000 What percentage of their claims are the unsecured creditors likely to get? a. 100% (140,000) P320,000