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%

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 4MC: Marmol Corporation uses the allowance method for bad debts. During 2019, Marmol charged 50,000 to...

See similar textbooks

Similar questions

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 2,700 Accounts Payable 39,350 Notes Payable - PNB 18,500 Notes Payable - Suppliers 87,850 Accrued Wages 950 Accrued Taxes Cash Accounts Receivable P 52,500 15,000 51,250 1,850 Notes Receivable Inventories Prepaid Expenses Land and Buildings 4,650 61,250 Mortgage Bond Payable 90,000 48,800 Ordinary Share - P100 par Accumulated Profit (Deficit) Equipment 75,000 (30,850) P259,400 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…
Lugi Ka Na Company has been forced into bankruptcy as of April 30 because of its inability to pay its debts.The statement of financial position on that date shows:ASSETS LIABILITIES & EQUITYCash P5,400 Accounts Payable P105,000Accounts Receivable 78,700 Notes Payable – PNB 30,000Note Receivable 37,000 Notes Payable – suppliers 102,500Inventory 175,700 Accrued wages 3,700Prepaid Expenses 1,900 Accrued taxes 9,300Land and Building 122,500 Mortgage Bonds Payable 180,000Equipment, net 97,600 Common stock – P100 par 150,000Retained Earnings (61,700)Total Assets P518,800 Total Liabilities & Equity P518,800Additional information:a. Accounts receivable of P32,220 and notes receivable of P25,000 are expected to be collectible. The goodnotes are pledged to Philippine National Bank.b. Inventories are expected to bring in P90,200 when sold under bankruptcy conditions.c. Land and buildings have an appraised value of P190,000. They serve as security on the bonds.d. The current value of the…
Down Dog Corporation filed a petition for bankruptcy on June 30, 2014. Data relevant to its financial position as of this date are: Cash Accounts receivable-net Inventories Equipment-net Total assets Accounts payable Rent payable Wages payable Note payable plus accrued interest Capital stock Retained earnings (deficit) Total liabilities and equity Requirements: Book Value P3,000 72,000 60,000 165,000 P300,000 P72,000 21,000 45,000 96,000 180,000 (120.000) P300.000 Estimated Net Realizable Values P3,000 48,000 72,000 87,000 P210,000 1. Prepare a statement of affairs assuming that the note payable and interest are secured by a mortgage on the equipment. 2. Estimate the amount that will be paid to each class of claims if priority liquidation expenses, including trustee fees, are P24,000 and estimated net realizable values are realized.
At December 31, 2021, Wynne Company reported Accounts Receivable of $45,000 and Allowance for Doubtful Accounts of $3,500. On January 7, 2022, Brown Enterprises declares bankruptcy and it is determined that the receivable of $1,200 from Brown is not collectible. What is the cash realizable value of Accounts Receivable at December 31, 2021? Cash realizable value eTextbook and Media List of Accounts $ What entry would Wynne make to write off the Brown account? (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit eTextbook and Media List of Accounts What is the cash realizable value of Accounts Receivable after the Brown account is written off? Cash realizable value $
At December 31, 2018, Wynne Company reported Accounts Receivable of $45,000 and Allowance for Doubtful Accounts of $3,500. On January 7, 2019, Brown Enterprises declares bankruptcy and it is determined that the receivable of $1,200 from Brown is not collectible. What is the cash realializable value of accounts receivab;le after the Brown account is written off?
Use the following information to answer Question 21 and 22. Harrison Company has a loan receivable with a carrying value of $15,000 at December 31, 2019. On January 3, 2020, the borrower, Thomas Clark Imports, declares bankruptcy, and Harrison estimates that it will collect only 60% of the loan balance. 21) Which of the following entries would Harrison make to record the impairment under IFRS? a) Loan Receivable 9,000 Impairment Loss 9,000 b) Loan Recovery Expense 6,000 Loan Receivable 6,000 c) Impairment Loss 9,000 Loan Receivable 9,000 d) Bad Debt Expense 6,000 Provision for Doubtful Accounts 6,000 22) Assume that on January 5, 2021, Harrison learns that Thomas Clark Imports has emerged from bankruptcy. As a result, Harrison now estimates that all…
The annual report for Fabeck Finishing Corporation contained the following information: (in millions) Accounts Receivable Allowance for Doubtful Accounts Accounts Receivable, Net 2021 $673 32 $641 Assume that accounts receivable write-offs amounted to $13 during 2021 and $3 during 2020, and that Fabeck Finishing did not record any recoveries. Bad Debt Expense 2020 $735 31 $704 Required: Determine the Bad Debt Expense for 2021 based on the above facts. (Enter your answer in millions.) million
Assume that Waterway Company has recently fallen into financial difficulties. By reviewing all available evidence on December 31, 2020, one of Waterway’s creditors, the National American Bank, determined that Waterway would pay back only 65% of the principal at maturity. As a result, the bank decided that the loan was impaired. The loss is estimated to be $239,300.What entry should National American Bank make to record this loss?
The following Is a portion of the current assets section of the balance sheets of Avantl's, Inc., at December 31, 2020 and 2019: 12/31/20 12/31/19 Accounts receivable, less allowance for bad debts of $9,884 and $18,755, respectively $178,387 $223,883 Requlred: a. If $11,579 of accounts recelvable were written off during 2020, what was the amount of bad debts expense recognized for the year? (Hint. Use a T-account model of the Allowance account, plug in the three amounts that you know, and solve for the unknown.) Bad debt expense b. The December 31, 2020, Allowance account balance Includes $3,017 for a past due account that is not likely to be collected. This account has not been written off. |(1) If it had been written off, will there be any effect of the write-off on the working capital at December 31, 2020? Yes No (2) If It had been written off, will there be any effect of the write-off on net Income and ROI for the year ended December 31, 2020? Yes No c. The level of Avantı's sales…
On January 31, 2020, Allison company wrote off and uncollectible accounts of $8500. The company uses the allowance method for bad debts. The write off would cause total current assets to be? A decreased by $8,500, Increased by $8500 increase by $17,000 or will it remain the same amount?
Miner Company is being forced into bankruptcy. The Company's creditors and stockholders have requested an estimate of the results of liquidation of the Company. Miner's trial balance follows: Accounts Cash Debit Credit P6,000 63,000 Accounts receivable Allowance for bad debts P2,000 Notes receivable 50,000 1,200 Accrued interest on notes receivable Inventory Buildings Accumulated depreciation-Buildings Equipment Accumulated depreciation-Equipment Prepaid insurance 60,000 182,000 63,000 14,600 1,400 1,100 Goodwill 8,500 Accrued wages 6,000 2,400 170,000 80,000 1,600 Taxes payable Accounts payable and other liabilities Notes payable Accrued interest payable Common stock 110,000 Retained earnings (deficit) 50,000 Total P436,400 P436,400 The assets are expected to bring cash on conversion in the following amounts Accounts receivable P50,000 40,800 Notes receivable including P1,000 accrued interest Building 75,000 Prepaid insurance 400
The following information is available for Reagan Company: Allowance for doubtful accounts at December 31, 2020 (beginning balance) $ 8,000 Accounts receivable deemed worthless and written off during 2021 9,000 As a result of a review and aging of accounts receivable it has been determined that an allowance for doubtful accounts of $5,500 is needed at December 31, 2021. What amount should Reagan record as "bad debt expense" for the year ended December 31, 2021? $4.500 $5.500 $6.500 13.500