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%

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 49P

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Question

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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%

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