The inventory can be sold for P30,000 and is expected to incurshipping costs and selling expenses amounting to P1,000. Fairmarket value of the equipment amounted to P4,200.The notes receivable are pledged as a security on a note payableof P40,000. A note payable of P20,000 is secured by a lien onthe building, and the equipment is pledged as security on a notepayable of P10,000. One-half of the interest payable relates toP40,000 note payable; the other half of the interest payablerelates to the P20,000 note payable. There is no accrued intereston the other notes payable.Accounts payable and other liabilities include debts, taxes andassessments due to the National Government amounting toP10,000.The books do not show the estimated trust fees, accounting andlegal fees, amounting to P5,000, which will be incurred inconnection with the liquidation.Requirement: Compute for the payment to each class of creditor. Miner Company is being forced into bankruptcy. TheCompany's creditors and stockholders have requested anestimate of the results of liquidation of the Company. Miner'strial balance follows:AccountsDebit CreditCashP6,000Accounts receivable63,000Allowance for bad debtsP2,000Notes receivable50,000Accrued interest on notes receivable 1,200InventoryBuildingsAccumulated depreciation-BuildingsEquipmentAccumulated depreciation-EquipmentPrepaid insurance60,000182,00063,00014,6001,4001,100Goodwill8,500Accrued wagesTaxes payableAccounts payable and other liabilitiesNotes payableAccrued interest payableCommon stock6,0002,400170,00080,0001,600110,00050,000Retained earnings (deficit)TotalP436,400 P436 400The assets are expected to bring cash on conversion in thefollowing amountsAccounts receivableP50,000Notes receivable including P1,000 accruedinterest40,800Building75,000Prepaid insurance400

The process by which a company or organization stops operating, sells off its assets, settles its…

Miner Company is being forced into bankruptcy. The Company's creditors and stockholders have requested an estimate of the results of liquidation of the Company. Miner's trial balance follows: Accounts Cash Accounts receivable Allowance for bad debts Notes receivable 50,000 Accrued interest on notes receivable 1,200 60,000 182,000 Debit Credit P6,000 63,000 Inventory Buildings Accumulated depreciation-Buildings Equipment Accumulated depreciation-Equipment Prepaid insurance Goodwill Accrued wages Taxes payable Accounts payable and other liabilities Notes payable Accrued interest payable Common stock Retained earnings (deficit) Total 14,600 1,100 8,500 P2,000 63,000 Accounts receivable Notes receivable including P1,000 accrued interest Building Prepaid insurance 1,400 6,000 2,400 170,000 80,000 1,600 110,000 50,000 P436,400 P436,400 The assets are expected to bring cash on conversion in the following amounts P50,000 40,800 75,000 400

Miner Company is being forced into bankruptcy. The Company's creditors and stockholders have requested an estimate of the results of liquidation of the Company. Miner's trial balance follows: Accounts Cash Accounts receivable Allowance for bad debts Notes receivable 50,000 Accrued interest on notes receivable 1,200 60,000 182,000 Debit Credit P6,000 63,000 Inventory Buildings Accumulated depreciation-Buildings Equipment Accumulated depreciation-Equipment Prepaid insurance Goodwill Accrued wages Taxes payable Accounts payable and other liabilities Notes payable Accrued interest payable Common stock Retained earnings (deficit) Total 14,600 1,100 8,500 P2,000 63,000 Accounts receivable Notes receivable including P1,000 accrued interest Building Prepaid insurance 1,400 6,000 2,400 170,000 80,000 1,600 110,000 50,000 P436,400 P436,400 The assets are expected to bring cash on conversion in the following amounts P50,000 40,800 75,000 400

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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