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Because of the inability to pay debts, Steven Company has been forced into bankruptcy as of April 30, 2021. The statement of financial position on that date shows: Assets Liabilities P 52,500 P 2,700 Accounts Payable 39,350 Notes Payable- PNB 18,500 Notes Payable - Suppliers 87,850 Accrued Wages Cash Accounts Receivable 15,000 51,250 1,850 4,650 90,000 75,000 (30,850) P259,400 Notes Receivable Inventories Prepaid Expenses Land and Buildings 950 Accrued Taxes 61,250 Mortgage Bond Payable 48,800 Ordinary Share - P100 par Accumulated Profit (Deficit) Equipment P259,400 Accounts receivable of P16,110 and notes receivable of P12,500 are expected to be collectible. The good notes are pledged to Phil. National Bank. Inventories are expected to bring in P45,100 when sold under bankruptcy conditions. Land and building have an appraised value of P95,000. They serve as security on the bonds. The current value of the equipment, net of disposal cost is P9,000. The expected recovery percentage rounded off is: O 48% O 67% 50% 47%

Because of the inability to pay debts, Steven Company has been forced into bankruptcy as of April 30, 2021. The statement of financial position on that date shows: Assets Liabilities P 52,500 P 2,700 Accounts Payable 39,350 Notes Payable- PNB 18,500 Notes Payable - Suppliers 87,850 Accrued Wages Cash Accounts Receivable 15,000 51,250 1,850 4,650 90,000 75,000 (30,850) P259,400 Notes Receivable Inventories Prepaid Expenses Land and Buildings 950 Accrued Taxes 61,250 Mortgage Bond Payable 48,800 Ordinary Share - P100 par Accumulated Profit (Deficit) Equipment P259,400 Accounts receivable of P16,110 and notes receivable of P12,500 are expected to be collectible. The good notes are pledged to Phil. National Bank. Inventories are expected to bring in P45,100 when sold under bankruptcy conditions. Land and building have an appraised value of P95,000. They serve as security on the bonds. The current value of the equipment, net of disposal cost is P9,000. The expected recovery percentage rounded off is: O 48% O 67% 50% 47%

FINANCIAL ACCOUNTING
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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Because of the inability to pay debts, Steven Company has been forced into bankruptcy as of April 30, 2021. The statement of financial position on that date shows: Assets Liabilities P 52,500 15,000 51,250 1,850 4,650 90,000 75,000 (30,850) P259,400 P 2,700 Accounts Payable 39,350 Notes Payable - PNB 18,500 Notes Payable - Suppliers 87,850 Accrued Wages Cash Accounts Receivable Notes Receivable Inventories Prepaid Expenses Land and Buildings Equipment 950 Accrued Taxes 61,250 Mortgage Bond Payable 48,800 Ordinary Share - P100 par Accumulated Profit (Deficit) P259,400 Accounts receivable of P16,110 and notes receivable of P12,500 are expected to be collectible. The good notes are pledged to Phil. National Bank. Inventories are expected to bring in P45,100 when sold under bankruptcy conditions. Land and building have an appraised value of P95,000. They serve as security on the bonds. The current value of the equipment, net of disposal cost is P9,000. The expected recovery percentage rounded off is: 48% 67% 50% 47%
Transcribed Image Text:Because of the inability to pay debts, Steven Company has been forced into bankruptcy as of April 30, 2021. The statement of financial position on that date shows: Assets Liabilities P 52,500 15,000 51,250 1,850 4,650 90,000 75,000 (30,850) P259,400 P 2,700 Accounts Payable 39,350 Notes Payable - PNB 18,500 Notes Payable - Suppliers 87,850 Accrued Wages Cash Accounts Receivable Notes Receivable Inventories Prepaid Expenses Land and Buildings Equipment 950 Accrued Taxes 61,250 Mortgage Bond Payable 48,800 Ordinary Share - P100 par Accumulated Profit (Deficit) P259,400 Accounts receivable of P16,110 and notes receivable of P12,500 are expected to be collectible. The good notes are pledged to Phil. National Bank. Inventories are expected to bring in P45,100 when sold under bankruptcy conditions. Land and building have an appraised value of P95,000. They serve as security on the bonds. The current value of the equipment, net of disposal cost is P9,000. The expected recovery percentage rounded off is: 48% 67% 50% 47%
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