Because of the inability to pay debts, Steven Company has been forced into bankruptcy as of April 30, 2021. The statement of financial position on that date shows: Assets Liabilities P 52,500 P 2,700 Accounts Payable 39,350 Notes Payable- PNB 18,500 Notes Payable - Suppliers 87,850 Accrued Wages Cash Accounts Receivable 15,000 51,250 1,850 4,650 90,000 75,000 (30,850) P259,400 Notes Receivable Inventories Prepaid Expenses Land and Buildings 950 Accrued Taxes 61,250 Mortgage Bond Payable 48,800 Ordinary Share - P100 par Accumulated Profit (Deficit) Equipment P259,400 Accounts receivable of P16,110 and notes receivable of P12,500 are expected to be collectible. The good notes are pledged to Phil. National Bank. Inventories are expected to bring in P45,100 when sold under bankruptcy conditions. Land and building have an appraised value of P95,000. They serve as security on the bonds. The current value of the equipment, net of disposal cost is P9,000. The expected recovery percentage rounded off is: O 48% O 67% 50% 47%

Because of the inability to pay debts, Steven Company has been forced into bankruptcy as of April 30, 2021. The statement of financial position on that date shows: Assets Liabilities P 52,500 P 2,700 Accounts Payable 39,350 Notes Payable- PNB 18,500 Notes Payable - Suppliers 87,850 Accrued Wages Cash Accounts Receivable 15,000 51,250 1,850 4,650 90,000 75,000 (30,850) P259,400 Notes Receivable Inventories Prepaid Expenses Land and Buildings 950 Accrued Taxes 61,250 Mortgage Bond Payable 48,800 Ordinary Share - P100 par Accumulated Profit (Deficit) Equipment P259,400 Accounts receivable of P16,110 and notes receivable of P12,500 are expected to be collectible. The good notes are pledged to Phil. National Bank. Inventories are expected to bring in P45,100 when sold under bankruptcy conditions. Land and building have an appraised value of P95,000. They serve as security on the bonds. The current value of the equipment, net of disposal cost is P9,000. The expected recovery percentage rounded off is: O 48% O 67% 50% 47%

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter3: Corporations: Introduction And Operating Rules

Section: Chapter Questions

Problem 59P

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Lugi Ka Na Company has been forced into bankruptcy as of April 30 because of its inability to pay its debts.The statement of financial position on that date shows:ASSETS LIABILITIES & EQUITYCash P5,400 Accounts Payable P105,000Accounts Receivable 78,700 Notes Payable – PNB 30,000Note Receivable 37,000 Notes Payable – suppliers 102,500Inventory 175,700 Accrued wages 3,700Prepaid Expenses 1,900 Accrued taxes 9,300Land and Building 122,500 Mortgage Bonds Payable 180,000Equipment, net 97,600 Common stock – P100 par 150,000Retained Earnings (61,700)Total Assets P518,800 Total Liabilities & Equity P518,800Additional information:a. Accounts receivable of P32,220 and notes receivable of P25,000 are expected to be collectible. The goodnotes are pledged to Philippine National Bank.b. Inventories are expected to bring in P90,200 when sold under bankruptcy conditions.c. Land and buildings have an appraised value of P190,000. They serve as security on the bonds.d. The current value of the…
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