Download 20737214 Chapter 7 Advance Accounting Volume 1 2008 PDF

Title20737214 Chapter 7 Advance Accounting Volume 1 2008
File Size173.7 KB
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Page 7

Marketable securities (12,000 – 10,500) 1,500
Trustee’s expenses 4,300
Depreciation 16,000 (21,800)

Net loss P( 6,800)

126 Chapter
7

SOLUTIONS TO PROBLEMS

Problem 7 – 1
(A) Laguna Company

Statement of Affairs
October 31, 2008

Book Estimated
Value Assets Realizable Value Free Assets

Assets pledge for fully secured creditors:
P107,000 .... Plant assets.................................................. P67,400

Less; Fully secured liabilities......................_ 50,400 P17,000
Assets pledged for partially secured creditors:

39,000. .... Inventories.................................................. P18,000

Free Assets:
4,000. ..... Cash............................................................ P 4,000
46,000. ..... Accounts, receivable................................... 46,000
2,000. ..... Supplies....................................................... __1,500 _51,500

Total free assets............................................... P68,500
Less: Unsecured liabilities with priority.......... __7,000

Net Free Assets............................................... P61,500
Estimated deficiency to unsecured creditors (to balance) _20,500

P198,000 P82,000
Book Creditors' Unsecured

Value Liabilities & Stockholders' Equity Claim Liabilities
Fully secured liabilities:

P50,400....... Mortgage payable (including interest, P400) P50,400
Partially secured liabilities:

21,000. . ..... Notes payable.............................................. P21,000
Less: Inventory............................................ _18,000 P 3,000

Unsecured creditors with priority:
5,800. . ..... Wages payable P 5,800
1,200. . ..... Property taxes payable................................ _1,200

Total............................................................ P 7,000
Unsecured creditors without priority:

60,000. . ..... Accounts payable........................................ 60,000
19,000. . ..... Notes payable.............................................. 19,000
Stockholders' Equity........................................ _____–

P198,000 P82,000
(B) Creditor Group Amount of Amount to

Percentage
Claim be Paid to be

paid

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