CHAP 5
PROBLEM 1: TRUE OR FALSE
PROBLEM 2: MULTIPLE CHOICE-THEORY
1D
p.158
2A
p.157
3A
p.187
4B
p.187
5D
p.186
PLE CHOICE-THEORY
PROBLEM 3 EXERCISES
ASSETS
CASH
ACCOUNTS RECEIVABLES (440K-24%)
NOTES RECEIVABLES
INTEREST NOTE RECEIVABLE
INVENTORY (840K-20K)
PREPAID ASSETS
LAND AND BUILDING
EQUIPMENT
TOTALS
LIABILITIES
ACCRUED EXPENSES
CURRENT TAX PAYABLE
ACCOUNTS PAYABLE
NOTE PAYABLE
LOAN PAYABLE
INTEREST ON LOAN PAYABLE
ADMINISTRATIVE EXPENSES
ESTIMATED DEFICIENCY
TOTALS
BOOK VALUES
5,000,000.00
600,000.00
.
80,000.00
440,000.00
200,000.00
1,060,000.00
20,000.00
7,400,000.00
BOOK VALUES
50,000.00
700,000.00
4,000,000.00
-
600,000.00
392,000.00
2,000,000.00
(342,000.00)
7,400,000.00
TOTAL FREE ASSETS
TOTAL UNSECURED LIABILITIES WITH PRIORITY
NET FREE ASSETS
DIVIDED BY: TOTAL UNSECURED LIABILITIES WITHOUT PRIORITY
ESTIMATED RECOVERY PERCENTAGE OF UNSECURED CREDITORS WITHOUT PRIORITY
MR. A OUTSTANDING RECEIVABLE
ESTIMATED RECOVERY PERCENTAGE OF UNSECURED CREDITORS WITHOUT PRIORITY
MR. A RECOVERY OF HIS CLAIM
REALIZABLE VALUES
80,000.00
334,400.00
200,000.00
20,000.00
820,000.00
5,200,000.00
400,000.00
7,054,400.00
442,000.00
700,000.00
2,000,000.00
600,000.00
4,000,000.00
30,000.00
60,000.00
7,832,000.00
777,600.00
7,054,400.00
BIG CO.
STATEMENT OF AFFFAIRS
ASSETS
ASSETS PLEDGED TO FULLY SECURED CREDITORS
LAND AND BUILDING
LOAN PAYABLE
INTEREST ON LOAN
ASSETS PLEDGED TO PARTIALLY SECURED CREDITORS
EQUIPMENT, NET
FREE ASSETS
CASH
ACCOUNTS RECEIVABLES
NOTES RECEIVABLES
INTEREST NOTE RECEIVABLE
INVENTORY
PREPAID ASSETS
TOTAL FREE ASSETS
UNSECURED LIABILITIES WITH PRIORITY
NET FREE ASSETS
ESTIMATED DEFICIENCY
TOTAL UNSECURED LIABILITIES WITH PRIORITY
LIABILITIES
UNSECURED LIABILITIES WITH PRIORITY
ADMINISTRATIVE EXPENSES
ACCRUED SALARIES
TAX PAYABLE
TOTAL UNSECURED LIABILITIES WITH PRIORITY
FULLY SECURED CREDITORS
LOAN PAYABLE
INTEREST ON LOAN PAYABLE
PARTIALLY SECURED CREDITORS
NOTE PAYABLE
EQUIPMENT, NET
UNSECURED CREDITORS
ACCRUED EXPENSES NET OF ACCRUED SALARIES (442K-50K)
ACCOUNTS PAYABLE
TOTAL UNSECURED LIABILITIES WITHOUT PRIORITY
SHAREHOLDERS EQUITY
2,624,400.00
(810,000.00)
1,814,400.00
2,592,000.00
70%
500,000.00
70%
350,000.00
RS
REALIZABLE VALUES
AVAILABLE FOR UNSECURED SECURITIES
5,200,000.00
(4,000,000.00)
(30,000.00)
1,170,000.00
400,000.00
80,000.00
334,400.00
200,000.00
20,000.00
820,000.00
-
-
1,454,400.00
2,624,400.00
(810,000.00)
1,814,400.00
777,600.00
2,592,000.00
REALIZABLE VALUES
AVAILABLE FOR UNSECURED SECURITIES
60,000.00
50,000.00
700,000.00
810,000.00
-
4,000,000.00
30,000.00
-
600,000.00
(400,000.00)
392,000.00
2,000,000.00
200,000.00
2,392,000.00
2,592,000.00
2,592,000.00
PROBLEM 4: MUTIPLE CHOICE-COMPUTATIONAL
1
2
3
4
5
6
7
8
9
10
E-COMPUTATIONAL
B
A
C
D
ASSETS
CASH
ACCOUNTS RECEIVABLE (600K*60%)
INVENTORY (1560K/2)
LAND AND BUILDING
EQUIPMENT (400K-70K)
TOTALS
LIABILITIES
ACCOUNTS PAYABLE (1600K-23K-420K)
INCOME TAX PAYABLE
NOTES PAYABLE
LOANS PAYABLE
INTEREST NOTES PAYABLE
INTEREST LOANS PAYABLE
ESTIMATED ADMIN EXPENSES
ACCRUED EXPENSES
ESTIMATED DEFICIENCY (SQUEEZE)
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
ASSETS PLEDGED TO FULLY SECURED CREDITORS
LAND & BUILDING
LOANS PAYABLE
INTEREST LOANS
ASSETS PLEDGED TO PARTIALLY SECURED CREDITORS
EQUIPMENT
NOTES PAYABLE
FREE ASSETS
CASH
ACCOUNTS RECEIVABLES
INVENTORY
TOTAL FREE ASSETS
UNSECURED LIABILITIES WITH PRIORITY
NET FREE ASSETS
ESTIMATED DEFICIENCY
TOTAL UNSECURED LIABILITIES WITHOUT PRIORITY
UNSECURED LIABILITIES WITH PRIORITIES
ADMIN. EXPENSES
INCOME TAX PAYABLE
ACCRUED EXPENSES
TOTAL UNSECURED LIABILITIES WITH PRIORITIES
FULLY SECURED LIABILITIES
LOANS PAYABLE
INTEREST LOANS
PARTIALLY SECURED LIABILITIES
NOTES PAYABLE
INTEREST ON NOTES
EQUIPMENT
UNSECURED LIABILITIES WITHOUT PRIORITIES
CASH DISCOUNT
WAIVED PAYMENT
ACCOUNTS PAYABLE
TOTAL UNSECURED LIABILITIES WITHOUT PRIORITIES
NFA
DIVIDED BY: UNSECURED LIABILITIES WITHOUT PRIORITIES
ESTIMATED PERCENTAGE
PARTIALLY CREDITORS [330K+(750K*63.45%)]
MR. A RECOVERY OF CLAIM (80K*63.45%)
B
D
TOTAL FREE ASSETS
FULLY SECURED CREDITORS
ASSETS PLEDGED TO PARTIALLY SECURED CREDITORS
UNSECURED PRIORITIES WITH LIABILITIES
NFA
NFA
DIVIDED BY: UNSECURED LIABILITIES WITHOUT PRIORITIES
ESTIMATED PERCENTAGE
PARTIALLY SECURED [60K+(40K*60%)]
GENERAL UNSECURED CREDITORS (260K*60%)
C
ATHENA CO (600K-100K)
RILEY CO
NAIA CO (120K-50K)
TOTALS
MULTIPLY: RATE
NET FREE ASSETS
A
A
B
ASSETS
● ASSETS TO BE REALIZED
ACCOUNTS RECEIVABLE
INVENTORY
EQUIPMENT
CASH
TOTALS
●ASSETS REALIZED
ACCOUNTS RECEIVABLE (600K*90%-108K)
INVENTORY (900K/2*80%)
EQUIPMENT (380K-50K)
TOTALS
LIABILITIES
●LIABILITIES TO BE LIQUIDATED
ACCOUNTS PAYABLE
LOANS PAYABLE
TOTALS
●LIABILITIES LIQUIDATED
PAYMENT OF ACCOUNTS PAYABLE
PAYMENT OF ACCRUED EXPENSES
PAYMENT OF LOANS PAYABLE
TOTALS
●SUPPLEMENTARY EXPENSES
LIQUIDATION COSTS
ASSETS TO BE REALIZED
ASSETS ACQUIRED
LIABILITIES LIQUIDATED
LIABILITIES NOT LIQUIDATED
SUPPLEMENTARY EXPENSES
NET GAIN (LOSS)
BEGINNING BALANCE
ACCOUNTS RECEIVABLE COLLECTED
SALE OF INVENTORY
SALE OF EQUIPMENT
SALE OF SCRAP MATERIALS
CASH ENDING BALANCE
REALIZABLE VALUES
100,000.00
360,000.00
780,000.00
2,300,000.00
330,000.00
3,870,000.00
1,157,000.00
780,000.00
1,000,000.00
1,200,000.00
80,000.00
70,000.00
120,000.00
160,000.00
4,567,000.00
(697,000.00)
3,870,000.00
ASSETS
2,300,000.00
(1,200,000.00)
(70,000.00)
1,030,000.00
370,000.00
(1,000,000.00)
-
100,000.00
360,000.00
780,000.00
1,240,000.00
2,270,000.00
(1,060,000.00)
1,210,000.00
697,000.00
1,907,000.00
LIABILITIES
120,000.00
780,000.00
160,000.00
1,060,000.00
-
1,200,000.00
70,000.00
-
1,000,000.00
80,000.00
(330,000.00)
(23,000.00)
(420,000.00)
1,600,000.00
750,000.00
1,157,000.00
1,907,000.00
1,210,000.00
1,907,000.00
63.45%
805,875.00
50,760.00
REALIZABLE VALUES
390,000.00
(130,000.00)
(60,000.00)
(20,000.00)
180,000.00
260,000.00
40,000.00
300,000.00
180,000.00
300,000.00
60%
84,000.00
156,000.00
REALIZABLE VALUES
500,000.00
80,000.00
70,000.00
650,000.00
65%
422,500.00
ASSETS
●ASSETS ACQUIRED
600,000.00
900,000.00
400,000.00
(100,000.00)
1,800,000.00
INVENTORY (900/2*60%)
270,000.00
●ASSETS NOT REALIZED
432,000.00
360,000.00
330,000.00
1,122,000.00
ACCOUNTS RECEIVABLE (600*10%)
INVENTORY (900K/2)
TOTALS
60,000.00
450,000.00
510,000.00
LIABILITIES
●LIABILITIES NOT LIQUIDATED
1,600,000.00
1,500,000.00
3,100,000.00
ACCRUED EXPENSES (100K-80K)
ACCOUNTS PAYABLE
TOTALS
20,000.00
1,600,000.00
1,620,000.00
100,000.00
80,000.00
1,000,000.00
1,180,000.00
●SUPPLEMENTARY INCOME
50,000.00
SRAP MATERIALS
10,000.00
DEBITS
CREDITS
1,800,000.00
270,000.00
1,180,000.00
1,620,000.00
50,000.00
1,122,000.00
510,000.00
3,100,000.00
10,000.00
4,920,000.00
4,742,000.00
ASSETS REALIZED
ASSETS NOT REALIZED
LIABILITIES TO BE LIQUIDATED
SUPPLEMENTARY INCOME
178,000.00
DEBITS
CREDITS
100,000.00
432,000.00
360,000.00
330,000.00
10,000.00
100,000.00
80,000.00
1,000,000.00
50,000.00
1,232,000.00
1,230,000.00
2,000.00
PAYMENT OF ACCOUNTS PAYABLE
PAYMENT OF SALARIES
PAYMENT OF LOAN
LIQUIDATION COSTS
BE LIQUIDATED
ARY INCOME
ACCOUNTS PAYABLE