POP Inc is to be liquidated and has the following liabilities: income taxes payable 42,805 wages payable 157,320 accounts payable (including customers credit balances of 50,000) 1,380,000 bonds payable(including interests of 50,000) 1,250,000 notes payable( excluding interests of 20,000) 670,000 The company's asset is composed of the following at their book values: cash 100,000 accounts receivable(including customer's credit balances mentioned above) 500,000 inventory (used as security for the notes) 330,000 land and building (used as security for the bonds) 1,500,000 comparing to their net realizable values, the followinghas been determined: - 20% of the accounts receivable is worthless - 1/3 of the inventory owned by the company is worthless - land and building is undervalued by 500,000 How much will be recovered by creditors from the account payable? Round off answers to two decimal places
POP Inc is to be liquidated and has the following liabilities: income taxes payable 42,805 wages payable 157,320 accounts payable (including customers credit balances of 50,000) 1,380,000 bonds payable(including interests of 50,000) 1,250,000 notes payable( excluding interests of 20,000) 670,000 The company's asset is composed of the following at their book values: cash 100,000 accounts receivable(including customer's credit balances mentioned above) 500,000 inventory (used as security for the notes) 330,000 land and building (used as security for the bonds) 1,500,000 comparing to their net realizable values, the followinghas been determined: - 20% of the accounts receivable is worthless - 1/3 of the inventory owned by the company is worthless - land and building is undervalued by 500,000 How much will be recovered by creditors from the account payable? Round off answers to two decimal places
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
POP Inc is to be liquidated and has the following liabilities:
| income taxes payable | 42,805 |
| wages payable | 157,320 |
| accounts payable (including customers credit balances of 50,000) | 1,380,000 |
| bonds payable(including interests of 50,000) | 1,250,000 |
| notes payable( excluding interests of 20,000) | 670,000 |
The company's asset is composed of the following at their book values:
| cash | 100,000 |
| 500,000 | |
| inventory (used as security for the notes) | 330,000 |
| land and building (used as security for the bonds) | 1,500,000 |
comparing to their net realizable values, the followinghas been determined:
- 20% of the accounts receivable is worthless
- 1/3 of the inventory owned by the company is worthless
- land and building is undervalued by 500,000
How much will be recovered by creditors from the account payable? Round off answers to two decimal places
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