Conpute the loss on asset realization 2. Compute the gain or (loss) on asset realization
The COCO Manufacturing Company has been forced into bankruptcy as of April 30, 2022. The
ASSETS:
Cash P 2,700
Notes Receivable 18,500
Inventories 87,850
Prepaid Expenses 950
Land and Buildings 61,250
Equipment 48,800
Total ?
LIABILITIES AND EQUITY:
Accounts Payable P52,500
Notes Payable - PNB 15,000
Notes Payable - Suppliers 51,250
Accrued Wages 1,850
Accrued Taxes 4,650
Mortgage Bonds Payable 90,000
Common Stock - P 100 par 75,000
Total ?
Additional Information:
▪Accounts Receivable of P 16,110 and Noted Receivable of P 12,500 are expected to be collectible. The good notes are pledged to Philippine National Bank (PNB).
▪Inventories are expected to bring in P 45,100 when sold under bankruptcy conditions.
▪Land and Buildings have an appraised value of P 95,000. They serve as security on the bonds.
▪The current value of the equipment, net of disposal cost is P 9,000.
▪Prepaid expenses are nonrecoverable.
▪Estimated legal and accounting fees for the liquidation are P 1,000.
▪Unrecorded interest on notes payable to supplier amounts to P 500.
Requirements:
1. Conpute the loss on asset realization
2. Compute the gain or (loss) on asset realization
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