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

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
Government claims to unpaid taxes Salary during last month owed to Mr. Key (not an officer) Administrative expenses Salary during last month owed to Ms. Rankin (not an officer) Unsecured accounts payable Required: Indicate how much money will be paid to the creditor associated with each debt. Types of Debts Administrative expenses Salary during last month owed to Mr. Key and Ms. Rankin Government claims to unpaid taxes Amounts $ 4,150 $ 7,700 19,525 4,150 5,930 8,250
At January 1, 2021, Rothschild Chair Company, Inc., was indebted to First Lincoln Bank under a $39 million, 10% unsecured note. The note was signed January 1, 2018, and was due December 31, 2024. Annual interest was last paid on December 31, 2019. Rothschild Chair Company was experiencing severe financial difficulties and negotiated a restructuring of the terms of the debt agreement. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Prepare all journal entries by Rothschild Chair Company, Inc., to record the restructuring and any remaining transactions relating to the debt under each of the independent circumstances below: 1. First Lincoln Bank agreed to settle the debt in exchange for land having a fair value of $35 million but carried on Rothschild Chair Company's books at $30.1 million. 2. First Lincoln Bank agreed to (a) forgive the interest accrued from last year, (b) reduce the remaining four…
A4
At January 1, 2021, Rothschild Chair Company, Inc., was indebted to First Lincoln Bank under a $20 million, 10% unsecured note. The note was signed January 1, 2018, and was due December 31, 2024. Annual interest was last paid on December 31, 2019. Rothschild Chair Company was experiencing severe financial difficulties and negotiated a restructuring of the terms of the debt agreement. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Prepare all journal entries by Rothschild Chair Company, Inc., to record the restructuring and any remaining transactions relating to the debt under each of the independent circumstances below: 1. First Lincoln Bank agreed to settle the debt in exchange for land having a fair value of $16 million but carried on Rothschild Chair Company’s books at $13 million. 2. First Lincoln Bank agreed to (a) forgive the interest accrued from last year, (b) reduce the remaining four…
At January 1, 2024, NCI Industries, Incorporated was indebted to First Federal Bank under a $246,000, 10% unsecured note. . The note was signed January 1, 2017, and was due December 31, 2025. Annual interest was last paid on December 31, 2022. • NCI was experiencing severe financial difficulties and negotiated a restructuring of the terms of the debt agreement. • First Federal agreed to reduce last year's interest and the remaining two years' interest payments to $11,844 each and delay all payments until December 31, 2025, the maturity date. Required: Prepare the journal entries by NCI Industries, Incorporated, necessitated by the restructuring of the debt at (1) January 1, 2024; (2) December 31, 2024; and (3) December 31, 2025. Note: Do not round intermediate calculations. Round final answers to the nearest whole dollar. If no entry is required for a transaction/event, select "No journal entry required in the first account field. Use tables, Excel, or a financial calculator. (FV of…
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?
At January 1, 2024, Rothschild Chair Company, Incorporated, was indebted to First Lincoln Bank under a $35 million, 12% unsecured note. The note was signed January 1, 2021, and was due December 31, 2027. Annual interest was last paid on December 31, 2022. Rothschild Chair Company was experiencing severe financial difficulties and negotiated a restructuring of the terms of the debt agreement. Required: Prepare all journal entries by Rothschild Chair Company, Incorporated, to record the restructuring and any remaining transactions relating to the debt under each of the independent circumstances below: 1. First Lincoln Bank agreed to settle the debt in exchange for land having a fair value of $31 million but carried on Rothschild Chair Company's books at $26.5 million. 2. First Lincoln Bank agreed to (a) forgive the interest accrued from last year, (b) reduce the remaining four interest payments to $1 million each, and (c) reduce the principal to $28.5 million. 3. First Lincoln Bank…
Ataway Company has severe financial difficulties and is considering filing a bankruptcy petition. At this time, it has the following assets and liabilities. The assets are stated at net realizable value. In a liquidation, how much money would be paid on the partially secured debt?
At January 1, 2021, Rothschild Chair Company, Inc., was Indebted to First Lincoln Bank under a $20 million, 10% unsecured note. The note was signed January 1, 2018, and was due December 31, 2024. Annual interest was last pald on December 31, 2019. Rothschild Chair Company was experiencing severe financial difficulties and negotiated a restructuring of the terms of the debt agreement. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use approprlate factor(s) from the tables provlded.) Check my work Required: Prepare all journal entries by Rothschild Chair Company, Inc., to record the restructuring and any remaining transactions relating to the debt under each of the independent circumstances below: 1. First Lincoln Bank agreed to settle the debt in exchange for land having a fair value of $16 million but carried on Rothschild Chair Company's books at $13 million. 2. First Lincoln Bank agreed to (a) forgive the interest accrued from last year, (b) reduce the…
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?
Check my work Shi Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $25,900 in free cash. The following debts, totaling $41,550, remain: Government claims to unpaid taxes Salary during last month owed to Mr. Key (not an officer) Administrative expenses Salary during last month owed to Ms. Rankin (not an officer) Unsecured accounts payable $ 6,700 18,525 3,150 Fook 5,925 7,250 "rint erences Indicate how much money will be paid to the creditor associated with each debt. Types of Debts + Amounts Mc Graw Hill MAY dtv SOUTARE * F2 14 E7 F3 F4 FS M5 23 2$ % & 2 3 4 5 7 9 W E T. Y S F G K C V alt mmand command option V