Book Value Realizable Value Cash P20,000 P20,000 Accounts receivable-net 100,000 75,000 150,000 250,000 Inventories 70,000 260,000 Plant assets-net Total P520,000 Preferred Creditors P70,000 Accounts Payable-unsecured Notes payable-secured by 150,000 accounts receivable 100,00 Mortgage payable-secured by all plant assets 200,000 Total P520,000 In the event of liquidation: 7. What is the estimated amount available to unsecured creditors without priority? 8. What is the estimated deficiency in the payment of creditors?

Book Value Realizable Value Cash P20,000 P20,000 Accounts receivable-net 100,000 75,000 150,000 250,000 Inventories 70,000 260,000 Plant assets-net Total P520,000 Preferred Creditors P70,000 Accounts Payable-unsecured Notes payable-secured by 150,000 accounts receivable 100,00 Mortgage payable-secured by all plant assets 200,000 Total P520,000 In the event of liquidation: 7. What is the estimated amount available to unsecured creditors without priority? 8. What is the estimated deficiency in the payment of creditors?

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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Question

Book Value
Realizable Value
Cash
P20,000
P20,000
Accounts receivable-net
100,000
75,000
Inventories
150,000
250,000
70,000
260,000
Plant assets-net
Total
P520,000
Preferred Creditors
P70,000
Accounts Payable-unsecured
Notes payable-secured by
150,000
accounts receivable
100,00
Mortgage payable-secured by
all plant assets
Total
200,000
P520,000
In the event of liquidation:
7. What is the estimated amount available to unsecured creditors without priority?
8. What is the estimated deficiency in the payment of creditors?

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