Fact pattern: one-fourth represents secured and priority daims. 1. The "net free assets" are P75. only one-third (1/3) of their claim. 3. Mr. A has a P36 loan receivable from Green Corp. The loan is secured by an asset with a carrying amount of P40. Mr. A can expect payment of P18 on the loan. 4. Mr. B has a P15 note receivable from Green Corp. The note is secured by an asset with a carrying amount of P20. Mr. B can expect payment of P11 on the note. 5. You are a major shareholder of Green Corp. You own 80 out of the 100 outstanding ordinary shares with P1 par value per share. You can expect to recover nothing on the liquidation of Green Corp.
Fact pattern: one-fourth represents secured and priority daims. 1. The "net free assets" are P75. only one-third (1/3) of their claim. 3. Mr. A has a P36 loan receivable from Green Corp. The loan is secured by an asset with a carrying amount of P40. Mr. A can expect payment of P18 on the loan. 4. Mr. B has a P15 note receivable from Green Corp. The note is secured by an asset with a carrying amount of P20. Mr. B can expect payment of P11 on the note. 5. You are a major shareholder of Green Corp. You own 80 out of the 100 outstanding ordinary shares with P1 par value per share. You can expect to recover nothing on the liquidation of Green Corp.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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3,4,5. Kindly prove and Indicate if its TRUE or FALSE
Transcribed Image Text:The assets are expected to be realized at an average of 75% of
Fact pattern:
one-fourth represents secured and priority claims.
1. The "net free assets" are P75.
2. Unsecured non-priority creditors would expect to recove
only one-third (1/3) of their claim.
3. Mr. A has a P36 loan receivable from Green Corp. The loan is
secured by an asset with a carrying amount of P40. Mr. A can
expect payment of P18 on the loan.
4. Mr. B has a P15 note receivable from Green Corp. The note is
secured by an asset with a carrying amount of P20. Mr. B can
expect payment of P11 on the note.
5. You are a major shareholder of Green Corp. You own 80 out of
the 100 outstanding ordinary shares with P1 par value per
share. You can expect to recover nothing on the liquidation ot
Green Corp.
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