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In a voluntary settlement, one group of creditors having claims of $1,000,000 will be immediately paid 95 cents on a dollar. The remainder of the creditors will postpone payment an additional 60 days. This is an example of ________.
- A) a composition
- B) a combination of a composition and extension
- C) an extension
- D) a liquidation
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- PROBLEM: The creditors of the RR Corp. agreed to a liquidation based on the statement of affairs, suggested that unsecured creditors, without priority would receive approximately P.60 on the peso. The unsecured creditors are interested in determining whether the preliminary estimate still seems appropriate. The trustee was originally assigned noncash asset for P1,480,000 and creditor claims as follows: Fully secured P670,000 Partially secured P400,000 Unsecured with priority P200,000 Unsecured without priority P320,000 Assets with book value of P45,000 and unsecured liabilities, without priority, of P35,000 were subsequently discovered. Assets with a total book value of P740,000 were sold for P715,000 net. Fully secured liabilities of P410,000 and partially secured liabilities of P280,000 were paid. Remaining liquidation expenses were estimated to be P30,000. Assume the remaining noncash assets have an estimated net realizable value as follows: Assets traceable to…Problem: A, B and C are solidary debtors to X and Y (solidary creditors) in the amount of PhP600,000.00. 1. How much is the liability of each solidary debtor to each of the solidary creditor? Explain your answer. 2. Assuming solidary debtor A paid solidary creditor X, what is the effect on the obligation? What is the right acquired by solidary debtor A after complying with the obligation? On the other hand, what is the obligation of solidary creditor X to the other creditor? EXPLAIN YOUR ANSWERS. Problem: MM (debtor) binds himself to deliver to PP (creditor) a brand new 60 inch. Samsung t.v. set, or a Macbook Pro laptop, or a two-door Samsung refrigerator. Prior to the date of delivery, MM's Macbook Pro laptop was stolen. 1. What is the effect of the loss of the laptop to the obligation of MM? Explain your answer. 2. What if the Macbook Pro laptop was lost due to the fault of MM, what is the effect on his obligation to PP? Explain your answer.Problem: A, B and C are solidary debtors to X and Y (solidary creditors) in the amount of PhP600,000.00. 1. How much is the liability of each solidary debtor to each of the solidary creditor? Explain your answer. 2. Assuming solidary debtor A paid solidary creditor X, what is the effect on the obligation? What is the right acquired by solidary debtor A after complying with the obligation? On the other hand, what is the obligation of solidary creditor X to the other creditor?
- The creditors of the RR Corp. agreed to a liquidation based on the statement of affairs, suggested that unsecured creditors, without priority would receive approximately P.60 on the peso. The unsecured creditors are interested in determining whether the preliminary estimate still seems appropriate. The trustee was originally assigned noncash asset for P1,480,000 and creditor claims as follows: fully secured, P670,000; partially secured, P400,000; unsecured with priority, P200,000 and unsecured without priority, P320,000. Assets with book value of P45,000 and unsecured liabilities, without priority, of P35,000 were subsequently discovered. Assets with a total book value of P740,000 were sold for P715,000 net. Fully secured liabilities of P410,000 and partially secured liabilities of P280,000 were paid. Remaining liquidation expenses were estimated to be P30,000. Assume the remaining noncash assets have an estimated net realizable value as follows: Assets traceable to fully secured…Use the following information to answer Question 21 and 22. Harrison Company has a loan receivable with a carrying value of $15,000 at December 31, 2019. On January 3, 2020, the borrower, Thomas Clark Imports, declares bankruptcy, and Harrison estimates that it will collect only 60% of the loan balance. 21) Which of the following entries would Harrison make to record the impairment under IFRS? a) Loan Receivable 9,000 Impairment Loss 9,000 b) Loan Recovery Expense 6,000 Loan Receivable 6,000 c) Impairment Loss 9,000 Loan Receivable 9,000 d) Bad Debt Expense 6,000 Provision for Doubtful Accounts 6,000 22) Assume that on January 5, 2021, Harrison learns that Thomas Clark Imports has emerged from bankruptcy. As a result, Harrison now estimates that all…The creditors of Chester Company agree to accept promissorynotes for the amount of its indebtedness with a provisothat two-thirds of the annual profits must be appliedto their liquidation. How should these notes be reportedon the balance sheet of the issuing company? Give a reasonfor your answer.
- A, B and C are solidary debtors to X and Y (solidary creditors) in the amount of PhP600,000.00. 1. How much is the liability of each solidary debtor to each of the solidary creditor? Explain your answer. 2. Assuming solidary debtor A paid solidary creditor X, what is the effect on the obligation? What is the right acquired by solidary debtor A after complying with the obligation? On the other hand, what is the obligation of solidary creditor X to the other creditor? EXPLAIN YOUR ANSWERS.A, B and C are solidary debtors of W and Y, joint creditors for P 12,000 where the share of the debtors in the obligation is 2:3:5 while the share of the creditors is 1:2. If A is insolvent, which of the following is correct? a. W or Y can collect from B and C P12,000 b. Y can collect from either B or C P8,000 c. Y can collect from C P6,400 d. W can collect from B P3,200A contract for debt imposes on one a company to pay a person monthly payment of $100 for as long as itremains in business. This company faces no known risk of bankruptcy and therefore has no definite life(yes, companies can “live” forever). The beneficiary of this contract, the person receiving the payments, is planning to sell the rights in this contract (because he thinks he cannot live forever) and received three offers of payments now:[a] $200[b] $1,000[c] $10,000What is the implied time value of money (monthly interest rate) in each offer?
- CHOOSE THE LETTER OF ANSWER During 2019, Mansmith Company guaranteed a supplier’s P500,000 loan from a bank. On October 1, 2019, the entity was notified that the supplier had defaulted on the loan and filed for bankruptcy protection. Counsel believed that the entity would probably have to pay P250,000 under the guarantee. As a result of the supplier’s bankruptcy, the entity entered into a contract in December 2019 to retool its machines so that the entity could accept parts from other suppliers. Retooling costs are estimated to be P300,000.What amount should be reported as liability on December 31, 2019? a. 250,000b. 450,000c. 550,000d. 750,000A debtor firm’s 12/31/21 statement of financial position is to be issued of 4/15/22. A long-term obligation contracted in 2019 for settlement on 1/15/22 was extinguished through cash payment on its due date. On 1/20/22, a 5-year note was issued to replace the cash used up for the payment made on 1/15/22. Which of the following statements is correct? Group of answer choices The original obligation should be reported in the 2021 statement of financial position as a current liability because the entity does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. The new obligation entered into on 1/20/22 should be reported in the 2022 statement of financial position as a non-current liability because it is due to be settled beyond twelve months after the reporting period. The original obligation should be reported in the 2022 statement of financial position as a non-current liability because the entity does have an…21. A promissory note which is dated January 1, 20A was received from a client for service rendered by the ML Company for P350,000. Its term is 1 year (360 days) and carries with it a 10% interest rate. On the same date, due to financial needs, the company immediately have it discounted to a financial provider at 15% discount. Compute the amount of loss if the discounting arrangement is a conditional sale. Round off final answer to the nearest peso.