Africa Company recently filed for bankruptcy. Immediately before liquidation. Africa Co. had the following statement of financial position Cash Investments at FVPL Accounts receivable Inventory Total P50,000 Accounts payable P650,000 150,000 Contributed capital 500,000 300,000 Retained eamings (150,000) 500,000 P1,000,000 Total P1,000,000 Africa had the following transactions in relation to its liquidation process • Sale of inventory amounted to P300,000. P50.000 was on account with the remainder on cash basis. The cost of merchandise sold amounted to P315,000. • Collections of receivables. P115.000. Purchase of additional inventory on account. P15,000. Paid suppliers, P350,000 Sold its investment at FVPL for P186500. including accrued interest of P1,500. Paid expenses of the trustee. P75.000. Unpaid expenses incurred amounted to P3500 Wrote-off P15.000 of its accounts receivables Required 1. How much is the net loss during the liquidation process?
Africa Company recently filed for bankruptcy. Immediately before liquidation. Africa Co. had the following statement of financial position Cash Investments at FVPL Accounts receivable Inventory Total P50,000 Accounts payable P650,000 150,000 Contributed capital 500,000 300,000 Retained eamings (150,000) 500,000 P1,000,000 Total P1,000,000 Africa had the following transactions in relation to its liquidation process • Sale of inventory amounted to P300,000. P50.000 was on account with the remainder on cash basis. The cost of merchandise sold amounted to P315,000. • Collections of receivables. P115.000. Purchase of additional inventory on account. P15,000. Paid suppliers, P350,000 Sold its investment at FVPL for P186500. including accrued interest of P1,500. Paid expenses of the trustee. P75.000. Unpaid expenses incurred amounted to P3500 Wrote-off P15.000 of its accounts receivables Required 1. How much is the net loss during the liquidation process?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Africa Company recently filed for bankruptcy. Immediately before liquidation. Africa Co. had
the following statement of financial position
Cash
Investments at FVPL
Accounts receivable
Inventory
Total
P50,000 Accounts payable
P650,000
150,000 Contributed capital
500,000
300,000 Retained eamings
(150,000)
500,000
P1,000,000 Total
P1,000,000
Africa had the following transactions in relation to its liquidation process
• Sale of inventory amounted to P300,000. P50.000 was on account with the remainder on
cash basis. The cost of merchandise sold amounted to P315,000.
• Collections of receivables. P115.000.
Purchase of additional inventory on account. P15,000.
Paid suppliers, P350,000
Sold its investment at FVPL for P186500. including accrued interest of P1,500.
Paid expenses of the trustee. P75.000. Unpaid expenses incurred amounted to P3500
Wrote-off P15.000 of its accounts receivables
Required
1. How much is the net loss during the liquidation process?
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