When AAA Company filed for liquidation with the Securities and Exchange Commission, it prepared the following statement of financial position: Current Assets (net realizable value, P50,000) P 80,000 Land and Building (fair value, P240,000) Goodwill (fair value, 0) 200,000 40,000 Total Assets P320,000 Accounts Payable P160,000 Mortgage Payable (secured by land & building) Ordinary share Accumulated profits 200,000 100,000 (140,000) Total Liabilities and Equity P320,000 What percentage of their claims are the unsecured creditors likely to get? 100% 43.75% 56.25% 50.00%

When AAA Company filed for liquidation with the Securities and Exchange Commission, it prepared the following statement of financial position: Current Assets (net realizable value, P50,000) P 80,000 Land and Building (fair value, P240,000) Goodwill (fair value, 0) 200,000 40,000 Total Assets P320,000 Accounts Payable P160,000 Mortgage Payable (secured by land & building) Ordinary share Accumulated profits 200,000 100,000 (140,000) Total Liabilities and Equity P320,000 What percentage of their claims are the unsecured creditors likely to get? 100% 43.75% 56.25% 50.00%

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Discuss the terms relevance and faithful representation as they relate to financial accounting information.
What is the relationship between accounting quality and earnings management?
Discuss Practical Implementations of any one generally accepted accounting Principle (GAAP), discussion may be elaborated with example.
What are the accounting measurements (principles and practices) regarding IFRS?
How does the concept of uniformity relate to comparability in the accountingliterature?
Make logical comparison between financial accounting with other fields of accounting ?
Hypothetically discuss Assumptions of Accounting.
In general, what is the conceptual framework that underlies accounting principles?
How do changes in accounting standards or policies affect accounting quality?
Explain differential effects on accounting standards.
Explain the concept of "fair value" in accounting and provide an example of how it is applied in financial reporting.