deficit

Distressed Corporation is undergoing liquidation. Relevant information as of January 1, 20x1 is shown below: ASSETS Carrying Net Realizable Cash Accounts Receivable Equipment-net Land Amount P250,000 150,000 600,000 1,700,000 P2,700,000 Value P300,000 355,649 200,000 1,500,000 P2,355,649 TOTAL ASSETS LIABILITIES Carrying Amount P1,000,000 500,000 800,000 800,000 P3,100,000 Settlement Amount P1,000,000 Accounts Payable Salaries Payable Notes Payable Loan Payable TOTAL LIABILITIES 500,000 805,234 800,000 P3,105,234 EQUITY Share Capital Retained Earnings Capital Deficiency P1,600,000 (2,000,000) (400,000) TOTAL LIABILITIES & EQUITY P2,700,000 Additional Information: Administrative expenses amounting to P180,744 are expected to be incurred during the liquidation process. The equipment is pledged to the loan payable. The land is pledged to the notes payable.

What is Return to Equity? Interest paid on debt Revenue minus Costs Only Retained Earnings All of the Above

A decrease in Accounts Payable is a ( SOURCE or  USE) of funds?

Accruals occur when the cash flow precedes either revenue or expense recognition. True/False?

Which of the following is NOT a possible measure of debt capacity? Group of answer choices Debt Outstanding ratio Debt service ratio Debt outstanding per capita Operating ratio

Why are claims on income discretionary with equityfinancing but nondiscretionary with debt financing?

The difference between the sources (in nows) and uses (out nows) of cash represents the net cash flow during the reporting period. True or false? How is this information very important?

Define exposure, differentiating between accounting and economic exposure. What role does inflation play?

Consider the “Cash Flow Available for Debt Repayment” metric in the Cash Flow Projections and Debt Schedule of an LBO Model. The statements below list similarities and differences between this metric and the “Free Cash Flow” metric, as it is normally defined and used in 3-statement models.Which of these statements list(s) a similarity or difference that is INCORRECT?a. Both figures deduct the Net Interest Expense but exclude Optional Principal Repayments on New Debt used to fund the LBO.b. Free Cash Flow is a component of Cash Flow Available for Debt Repayment, along with an addition for the Beginning Cash, a deduction for the Minimum Cash, and other possible adjustments.c. Free Cash Flow is capital structure-neutral, but Cash Flow Available for Debt Repayment is not because it changes throughout the LBO holding period as the company repays its Debt balance.d. The Change in Debt each year should equal the Cash Flow Available for Debt Repayment each year, but it will never equal the…