The following balances were ascertained in NOMONEY Corp. which is experiencing insolvency:CashP8,000Accounts payableP80,000Notes receivable120,000Accrued expenses30,000Inventories80,000Salaries payable15,000Prepaid expenses10,000Mortgage payable155,000Equipment, net150,000Ordinary shares100,000 Deficit(12,000)TotalP368,000TotalP368,000 Additional information: Estimated net realizable value of the notes receivable was P105,000 and was pledged to the mortgage payable.80% of the book values of the inventories can be sold at P45,000 and was pledged to 60% of the accounts payable.The remaining book value of the inventories have an estimated fair value of P20,000.80% of the remaining unpaid accounts payable were secured by the equipment having an estimated fair value of P60,000.Prepaid expenses has no estimated fair value.Liquidation and administration expenses were estimated in the amount of P8,000.Income tax payable had been accrued in the amount of P2,000 (the accountant recorded it using the accrued expense account)Interest on the notes receivable and mortgage payable have not been accrued in the amount of P10,000 and P15,000 respectively.How much are the net free assets?

Name: The following balances were ascertained in NOMONEY Corp. which is expe
Uploaded: 2024-03-04T10:43:15.000Z
Channel: Bartleby
Description: The following balances were ascertained in NOMONEY Corp. which is experiencing insolvency:CashP8,000Accounts payableP80,000Notes receivable120,000Accrued expenses30,000Inventories80,000Salaries payable15,000Prepaid expenses10,000Mortgage payable155,0

The question is related to Liquidation. The details are given.

Answered: The following balances were ascertained…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Topic Video

Question

100%

The following balances were ascertained in NOMONEY Corp. which is experiencing insolvency:

Cash	P8,000	Accounts payable	P80,000
Notes receivable	120,000	Accrued expenses	30,000
Inventories	80,000	Salaries payable	15,000
Prepaid expenses	10,000	Mortgage payable	155,000
Equipment, net	150,000	Ordinary shares	100,000
		Deficit	(12,000)
Total	P368,000	Total	P368,000

Additional information:

Estimated net realizable value of the notes receivable was P105,000 and was pledged to the mortgage payable.
80% of the book values of the inventories can be sold at P45,000 and was pledged to 60% of the accounts payable.
The remaining book value of the inventories have an estimated fair value of P20,000.
80% of the remaining unpaid accounts payable were secured by the equipment having an estimated fair value of P60,000.
Prepaid expenses has no estimated fair value.
Liquidation and administration expenses were estimated in the amount of P8,000.
Income tax payable had been accrued in the amount of P2,000 (the accountant recorded it using the accrued expense account)
Interest on the notes receivable and mortgage payable have not been accrued in the amount of P10,000 and P15,000 respectively.

How much are the net free assets?

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions