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Compute the estimated settlement per peso of unsecured creditors.

Compute the estimated settlement per peso of unsecured creditors.

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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Compute the estimated settlement per peso of unsecured creditors.

. The balance sheet of Evergreen Company at June 30, 2012 contains the following items: Assets Cash P 80,000 Accounts receivable (net) 140,000 Inventories 100,000 Land 260,000 Building – net 200,000 Machinery – net 120,000 Patent 100,000 Total P1,000,000
Transcribed Image Text:. The balance sheet of Evergreen Company at June 30, 2012 contains the following items: Assets Cash P 80,000 Accounts receivable (net) 140,000 Inventories 100,000 Land 260,000 Building – net 200,000 Machinery – net 120,000 Patent 100,000 Total P1,000,000
Liabilities and Stockholders' Equity Accounts Payable P 220,000 Wages Payable 120,000 Taxes Payable 20,000 Mortgage Payable 300,000 Interest on Mortgage Payable 30,000 Notes Payable – unsecured 100,000 Interest Payable - unsecured 10,000 Capital Stock 400,000 Retained Earnings (deficit) (200,000) Total P1,000,000 The company is in financial difficulty, and its stockholders and creditors have requested a statement of affairs for planning purposes. The following information is available: a. The company estimates that P126,000 is the maximum amount of collectible for the accounts receivable. b. Except for 20% of the inventory items that are damaged and worth only P4,000, the cost of other items is expected to be recovered in full. c. The land and building have a combined appraisal value of P340,000 and are subject to the P300,000 mortgage and related accrued interest. d. The appraised value of the machinery is P40,000. Compute the following:
Transcribed Image Text:Liabilities and Stockholders' Equity Accounts Payable P 220,000 Wages Payable 120,000 Taxes Payable 20,000 Mortgage Payable 300,000 Interest on Mortgage Payable 30,000 Notes Payable – unsecured 100,000 Interest Payable - unsecured 10,000 Capital Stock 400,000 Retained Earnings (deficit) (200,000) Total P1,000,000 The company is in financial difficulty, and its stockholders and creditors have requested a statement of affairs for planning purposes. The following information is available: a. The company estimates that P126,000 is the maximum amount of collectible for the accounts receivable. b. Except for 20% of the inventory items that are damaged and worth only P4,000, the cost of other items is expected to be recovered in full. c. The land and building have a combined appraisal value of P340,000 and are subject to the P300,000 mortgage and related accrued interest. d. The appraised value of the machinery is P40,000. Compute the following:
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