Miner Company is being forced into bankruptcy. The Company's creditors and stockholders haverequested an estimate of the results of liquidation of the Company. Miner's trial balance follows:CreditAccountsCashAccounts receivableAllowance for bad debtsNotes receivableAccrued interest on notes receivableInventoryBuildingsAccumulated depreciation-BuildingsEquipmentAccumulated depreciation-EquipmentPrepaid insuranceGoodwillAccrued wagesTaxes payableAccounts payable and other liabilitiesNotes payableAccrued interest payableCommon stockRetained earnings (deficit)TotalDebitP6,00063,000P2,00050,0001,20060,000182,00063,00014,6001,4001,1008,5006,0002,400170,00080,0001,600110,00050,000P436,400 P436,400The assets are expected to bring cash on conversion in the following amountsAccounts receivableNotes receivable including P1,000 accruedinterestBuildingPrepaid insuranceP50,00040,80075,000400The inventory can be sold for P30,000 and is expected to incur shipping costs and selling expensesamounting to P1,000. Fair market value of the equipment amounted to P4,200.The notes receivable are pledged as a security on a note payable of P40,000. A note payable of P20,000 issecured by a lien on the building, and the equipment is pledged as security on a note payable of P10,000.One-half of the interest payable relates to P40,000 note payable; the other half of the interest payablerelates to the P20,000 note payable. There is no accrued interest on the other notes payable. Accounts payable and other liabilities include debts, taxes and assessments due to the NationalGovernment amounting to P10,000.The books do not show the estimated trust fees, accounting and legal fees, amounting to P5,000, whichwill be incurred in connection with the liquidation.Requirement: Compute for the payment to each class of creditor.

Liquidation In the liquidation process the first preference is to repayments of debenture / bond…

Accounts payable and other labilities include debts, taxes and assessments due to the National Government amounting to P10,000. The books do not show the estimated trust fees, accounting and legal fees, amounting to P5,000, which will be incurred in connection with the liquidation. Requirement: Compute for the payment to each class of creditor.

Accounts payable and other labilities include debts, taxes and assessments due to the National Government amounting to P10,000. The books do not show the estimated trust fees, accounting and legal fees, amounting to P5,000, which will be incurred in connection with the liquidation. Requirement: Compute for the payment to each class of creditor.

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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