130
Chapter 7 CHAPTER 7 MULTIPLE CHOICE ANSWERS AND SOLUTIONS
7-1:
7-2:
c
Amount realized secured by inventory inventor y Unsecured claim (P10,000 x 25%)
P 30,000 __2,500
Total amount r ecei cei ved ved
P 32,500 32,500
d Amount realized secured by inventory inventor y Unsecured claim (P88,000 x 75%)
P120,000 __66,000
Total amount r ecei cei ved ved
P186,000 P186,000
7-3:
d (P15,000,000 + P200,000)
7-4:
a Realizable value: Current assets Land and building Less mortgage payable
P 50,000 P240,000 _200,000
__40,000
Total Less accounts payable
90,000 _160,000
Estim ated ated defi defi ciency to unsecur unsecur ed creditor s
P 70,000 70,000
7-5:
c Total realizable value to unsecured creditors (P90,000)/total unsecured Claims (P160,000) = 56.25%
7-6:
a Free assets: Current assets Buildings and equipment
Total Liabilities with priority: Administrative Administrati ve expenses Salary payable Income taxes Total
P 33,000 _110,000 P143,000
P 20,000 6,000 __8,000 P 34,000
Corporation in Financial Difficulty – Liquidation 7-6, continued:
Free assets after payment of liabilities with priority: (P143,000 – P34,000) Unsecured liabilities Notes payable Accounts payable Bonds payable Total
131
P109,000 P 30,000 83,000 __70,000 P183,000
Percentage of Unsecured liabilities to be paid: P109,000 / P183,000 = 60% Payment of notes payable: Value of security (land) 60% of remaining P30,000 Total coll ected
7-7:
c Free assets: Other assets Excess from assets pledged with secured Creditors (P116,000 – P70,000)
Total Liabilities with priority Free assets after payment of liabilities with priority (P126,000 – P42,000) Unsecured liabilities: Excess of partially secured liabilities over pledge Assets (P130,000 – P50,000) Unsecured creditors Total
P 90,000 __18,000 P108,000
P 80,000 __46,000 P126,000 P 42,000 P 84,000
P 80,000 _200,000 P280,000
Recovery percentage: P84,000 / P280,000 = 30% Payment of partially secured debt: Value of pledged assets 30% of remaining P80,000 Total coll ected
P 50,000 __24,000 P 74,000
132
7-8:
Chapter 7
a The holder of Debt Two will receive P100,000 from the sale of the pledged asset. Since the holder wants to receive P142,000 out of the total debt of P170,000, the company must be able to generate enough cash to pay off 60% of the unsecured liabilities (P42,000/P70,000) after paying 100% of the liabilities with priority (P110,000).
Unsecured liabilities: Unsecured creditors Excess liability of Debt One in excess of pledged Asset (P210,000 – P180,000) Excess liability of Debt Two in excess of pledged Asset (P170,000 – P100,000)
P230,000 30,000 __70,000
Total unsecured liabilities Necessary percentage
P330,000 ____60%
Cash needed for these liabilities
P198,000
I n or der f or t he holder of Debt Two to r ecei ved exactl y P142,000, the other f r ee assets must be sold for P308,000. With that much money, the liabilities with priority
(P110,000) can be paid with the remaining P198,000 going to the unsecured debts of P330,000. This 60% figure would insure that the holder of Debt Two would get P100,000 from the pledged asset and P42,000 (P70,000 x 60%) from the free assets. 7-9:
a Estate equity, beg. (P100,000 – P85,000) Loss on realization (P100,000 – P75,000) Unrecorded liabilities: Interest expense Administrative expense Estate def ici t
7-10:
P 15,000 ( 25,000) P
250 4,000
(
4,250)
P( 14,250)
c Total assets at net realizable value Fully secured liabilities Estimated administrative expense
P 75,000 (40,000) _( 4,000)
Estimated amount available Unsecured claims (P45,000 + P250)
P 31,000 (45,250)
Estim ated defi ciency to unsecur ed creditor s
P 14,250
Corporation in Financial Difficulty – Liquidation
7-11:
7-12:
7-13:
133
b Assets pledged with fully secured creditors Fully secured creditors Free assets
P185,000 _130,000
55,000 _160,000
Total free assets Less: Liabilities with priority
215,000 __35,000
Avail able to unsecured non-pr ior it y claims
P180,000
b Machinery Recoveries of unsecured claims (50,000 - 10,000) X .50
P 10,000 __20,000
Amount to be realized
P 30,000
b Notes Payable Less: Inventories
P 23,940 19,200
_
Unsecured Liabilities % of recovery
4,740 ____78%
Recovery Add: Inventories
3,697 _19,200
Am oun t to be r eceived by Wood
P 22,897
- P7,000 - P30,000 - P57,200 [52,000 + (8,000 X .65)] - P72,800 (112,000 X .65)
7-14: 7-15: 7-16: 7-17:
a a b d
7-18:
d Estimated loss: Account Receivable Inventories (28,000 - 18,500) Building (59,000 - 22,000) Equipment (5,600 - 2,000) Goodwill Prepaid expenses Less: Stockholder's equity Common stock Deficit Estim ated defi ciency
3
P 8,160 9,500 7,000 3,600 5,650 ___430
P 64,340
P 72,000 ( 16,660)
_55,340 P 9,000
134
7-19:
Chapter 7
d Accounts Receivable (39,350 - 16, 110) Notes Receivable (18,500 - 12,500) Inventories (87,850 - 45,100) Prepaid expenses Equipment (48,800 - 9,000)
P 23,240 600 42,750 950 __39,800
Tot al esti mated l oss
P112,740
7-20:
b P33,750 (95,000 - 61,250) on Land and Building
7-21:
d Total Free Assets: Balance of Assets Pledged to Fully Secured Creditor (95,000 - 90,000) Free Assets: Cash Accounts Receivable Inventories Equipment
P 5,000 P 2,700 16,110 45,100 __9,000
Total Less: Unsecured liabilities with priority (1,850 + 4,650)
77,910 ___6,500
Net Free Assets Divide by Unsecured creditors: Balance of Partially Secured Creditor Notes Payable - PNB Notes Receivable
P 71,410
Accounts Payable Notes Payable
P 15,000 __12,500 52,500 __51,250
2,500 103,750 ÷ P106,250
Estim ated r ecover y %
7-22:
__72,910
d Fully secured (Notes Payable) Partially secured: Notes Payable - PNB Add (2,500 X 67%) Unsecured Creditor with Priority Unsecured Creditor without Priority (103,750 X 67%) Total
67%
P 90,000 P12,500 __1,675
14,175 6,500 __69,513 P180,188
Corporation in Financial Difficulty – Liquidation
7-23:
a Unsecured creditors without priority Estimated deficiency to unsecured creditors: Loss on realization Estimated liquidation expenses Total Stockholders’ equity Net free assets Liabilities with priority
135
P1,102,500 551,250 55,125 606,375 441,000
F r ee assets
7-24:
a Estimated net gain (loss) on realization: Gain on realization Loss on realization Estimated claims Total Stockholders equity
165,375 937,125 122,500 P 1,059,625
78,750 (336,700)
(257,950) ( 43,750) (301,700) 295,750
Estim ated def i ciency
7-25:
P( 5,950)
a Notes payable (175,000 – 140,000) Unsecured liabilities (420,000 – 52,500) Total Net free assets (157,500 + 210,000) – P52,500
P 35,000 367,500 402,500 315,000
Estim ated def i ciency
7-26:
7-27:
87,500
a Old receivable (net) Marketable securities Old inventory Depreciable assets- net
P 38,000 12,000 60,000 96,000
Tot al assets to be r eali zed
P206,000
a Old receivable New receivable Marketable securities Sales of inventory
P
Tot al asset r eal i zed
7-28:
a Gain on sale of inventory (P75,000 – 60,000) Loss on realization: Marketable securities (12,000 – 10,500) Trustee’s expenses Depreciation Net l oss
21,000 47,000 10,500 75,000
P153,500
15,000 1,500 4,300 16,000
(21,800) P( 6,800)
136 7-29:
Chapter 7 Correction of the problem: The book value of the M ort gage Payable shoul d be P440,000 . 1.
c
Net free assets: Cash Inventory Property and equipment (P560,000 – P440,000) Total free assets Less liabilities with priority
P 40,000 140,000 120,000 P300,000 160,000
Amoun t avail able for unsecured claims without pri orit y
P140,000
2.
a
Net free assets / Unsecured creditors without priority P140,000 / (P50,000 + P300,000) = 40%
3.
a
Unsecured liabilities with priority Fully secured liabilities (Mortgage payable) Partially secured liabilities (Note payable): Secured by accounts receivable Unsecured (P50,000 x 40%) Unsecured liabilities without priority Total estimated payment to creditors 7-30:
1.
P160,000 440,000 P150,000 20,000
170,000 120,000 P890,000
a
Debits: Assets to be realized Assets acquired Liabilities liquidated Liabilities not liquidated Supplementary charges Total
P 330,000 360,000 360,000 450,000 468,000 P1,968,000
Credits: Assets realized Assets not realized Liabilities to be liquidated Liabilities assumed Supplementary credits
P 420,000 150,000 540,000 180,000 P1,800,000
Net l oss
P 168,000
Corporation in Financial Difficulty – Liquidation
137
7-3-, continued:
2.
7-31:
a
Capital stock Retained earnings Liabilities not liquidated Total assets Less assets not realized
P300,000 120,000 450,000 P870,000 150,000
Cash balance
P720,000
1. a 2. a 3. a 4. d Supporting computations: Fully Secured
Liabilities Accounts payable Note payable – A Note payable – B Mortgage payable Accrued interest Other liabilities
Partially Secured
Unsecured W/Priority
P130,000
Unsecured W/O Prio. P150,000 40,000 200,000
P10,000
14,000
P 280,000 600,000 500,000 180,000 12,000 24,000
P10,000
P404,000
P1,596,000
P 20,000
60,000 68,000 50,000 45,000
P 150,000 200,000 360,000 300,000 60,000 260,000 60,000 45,000 P1,435,000
P560,000 300,000 180,000 12,000
Total
P322,000
Assets to be applied: Inventory Inventory Receivables Equipment Equipment Land Cash Other assets
Realizable Value P 150,000 200,000 360,000 300,000 60,000 260,000 60,000 45,000
Total
P1,435,000
Recovery
P860,000
Total
P130,000 P200,000 360,000 300,000 192,000 P10,000 P322,000
P860,000
P10,000
P243,000
100%
100%
100%
60.15%
5. d Total consideration to be received by Note B: Partially secured portion Unsecured portion (P200,000 x 60.15%)
P300,000 120,300
Total consider ation received
P420,300
138
Chapter 7
SOLUTIONS TO PROBLEMS Problem 7 – 1 (A)
Laguna Company Statement of Affairs October 31, 2011
Book Value
Estimated Realizable Value
Assets Assets pledge for fully secured creditors: P107,000 ... Plant assets .................................................. P67,400 Less; Fully secured liabilities ...................... _ 50,400 Assets pledged for partially secured creditors: 39,000 . ... Inventories................................................... P18,000 Free Assets: 4,000 .. ... Cash............................................................. 46,000 .. ... Accounts, receivable ................................... 2,000 .. ... Supplies .......................................................
P 4,000 46,000 __1,500
Free Assets
P17,000
_51,500
Total free assets ............................................... Less: Unsecured liabilities with priority..........
P68,500 __7,000
Net Free Assets................................................ Estimated deficiency to unsecured creditors (to balance)
P61,500 _20,500
P198,000 Book Value
Liabilities & Stockholders' Equity Fully secured liabilities: P50,400 ... ... Mortgage payable (including interest, P400) Partially secured liabilities: 21,000 ... ... Notes payable .............................................. Less: Inventory ............................................ Unsecured creditors with priority: 5,800 ... ... Wages payable 1,200 ... ... Property taxes payable ................................ Total ............................................................ Unsecured creditors without priority: 60,000 ... ... Accounts payable ........................................ 19,000 ... ... Notes payable .............................................. Stockholders' Equity ........................................
P198,000 (B) Creditor Group Unsecured liabilities with priority .................................... Fully secured creditors ...................................................... Partially secured creditors ................................................. Unsecured creditors without priority ................................ * P18,000 + (P3,000 X 0.75) = P20,250 (C) See statement of affairs in requirement (A)
Creditors' Claim
P82,000 Unsecured Liabilities
P50,400 P21,000 _18,000
P 3,000
P 5,800 _1,200 P 7,000 60,000 19,000 _____ – Amount of Claim P7,000 50,400 21,000 79,000
P82,000 Amount to Percentage be Paid to be paid P7,000 50,400 20,250 * 59,250
100.0% 100.0% 96.4% 75.0%
Corporation in Financial Difficulty – Liquidation
139
Problem 7 – 2 VC Corporation Statement of Realization and Liquidation Month Ended January 31, 2011
Assets to be realized: Land ....................... P10,000 Building ................. 43,000 Equipment .............. 28,000 Patents .................... __4,400 Assets Acquired ..............
Assets realized: land.............................. Building ...................... Equipment ................... Patents ......................... Assets not realized: Land ............................ Building ...................... Equipment ...................
0 0 8,800 _12,000
P20,800
P10,000 43,000 _13,000
66,000
Liabilities to be liquidated: Accounts payable ........ P80,000 Loans payable ............. _40,000
120,000
Gain on realization ......... ............... ___7,600
Loss on realization ...... ..............
___6,200
Total ............................... ............... P213,000
Total ............................ ..............
P213,000
P85,400 0
Liabilities liquidated: Account payable .... P14,000 Loans payable ........ __7,000
21,000
Liabilities not liquidated: Account payable .... Loans payable ........
99,000
66,000 33,000
P
VC Corporation Statement of Financial Position January 31, 2011
Cash ............................................... Land ............................................... Building .......................................... Equipment ......................................
P 6,700 10,000 43,000 _13,000
Accounts payable ......................... Loans payable .............................. Estate deficit .................................
Total ............................................... P 72,700
P 66,000 33,000 ( 26,300) P 72,700
VC Corporation Estate Deficit January 31, 2011
Gain on realization .................................................................... Loss in realization .................................................................... Trustee's expenses ....................................................................
P 7,600 ( 6,200) ( 1,300)
Net gain on realization............................................................... Estate deficit, January 1, 2011 ...................................................
P 100 ( 26,400)
Estate deficit, January 31, 2011 .................................................
P(26,300)
140
Chapter 7 Problem 7 – 3
Rizal Corporation Statement of Affairs Book Values
Estimated Realizable Value
Free Assets
P102,000 43,000
P 59,000
Finished Goods .................................................. Less: Loan payable .............................................
P 55,000 50,000
5,000
Assets pledged to partially secured creditors: 32,000 ...... .... Accounts receivable (80% x 30,000) ................. 12,000 ...... .... Trucks ................................................................
24,000 3,500
Totals..................................................................
27,500
Free Assets: .... Cash.................................................................... .... AR (20% x 30,000) ............................................ .... Inventory – Materials ......................................... .... Prepaid expense.................................................. .... Trucks ................................................................ .... Equipment .......................................................... .... Intangible ...........................................................
4,000 6,000 27,000 0 2,500 25,000 _______
Assets
Assets pledged to fully secured creditors: P 80,000 ...... .... Land and building .............................................. Less: Mortgage payable ..................................... 50,000 ...... ....
4,000 ...... 8,000 ...... 36,000 ...... 1,000 ...... 8,000 ...... 45,000 ...... 16,000 ......
________
64,500
Total Free Assets .................................................... Less: Unsecured liability with priority (12,000 + 8,000)
P128,500 20,000
Net free assets ......................................................... Estimated deficiency to unsecured creditors (to Balance)
108,500 81,000
P 292,000 ...... .... Total unsecured liabilities ....................................... Book Values
Liabilities and Equity Fully secured creditors: P 43,000 ...... .... Mortgage payable ............................................... 50,000 ...... .... Loans payable ....................................................
P189,500 Creditors' Claim
Unsecured Liabilities
94,000 50,000
Total ...................................................................
144,000
Partially secured creditors': 25,000 ...... .... Bank Loan .......................................................... Less: Receivable (80% x 30,000) .......................
25,000 24,000
P 1,000
Truck Loan ......................................................... Less: trucks ........................................................
5,000 3,500
1,500
Unsecured creditors with Priority: 12,000 ...... .... Wages payable ................................................... 8,000 ...... .... Taxes payable .....................................................
12,000 8,000
Totals..................................................................
20,000
Unsecured creditors: 77,000 ...... .... Accounts payable ............................................... 110,000 ...... .... Stockholder Loan ............................................... ( 38,000) ...... .... Stockholder Equity .................. ...............................
77,000 110,000
5,000 ...... ....
P 292,000
Total ........................................................................
187,000 – P189,500
Corporation in Financial Difficulty – Liquidation
141
Problem 7 – 4 Mapayapa Corporation Statement of Affairs November 1
Book Value
Assets
Estimated Realizable Value
Free Assets
Assets pledged to fully secured creditors: P60,000.... ... Investments ................................................. 180,000.... ... Accounts receivable ....................................
P 69,000 171,000
Total ............................................................ Less: Note payable ......................................
240,000 210,000
P 30,000
Free assets: Cash............................................................. P 66,000 Accounts receivable .................................... 193,500 Merchandise inventory ................................ 180,000 Plant & equipment ...................................... 330,000 Notes receivable .......................................... 108,300 Patent........................................................... __12,000
_889,800
66,000.... ... 258,000.... ... 291,000.... ... 870,000.... ... 114,000.... ... – .... ...
Total free assets ........................................... Less: Unsecured liabilities with priority..........
919,800 __13,800
_________
Net free asset ............................................... Estimated deficiency (to balance) ...................
906,000 60,300
P1,839,000
Total ................................................................
P966,300
Book Value
Liabilities & Equity
Fully secured creditors: P 210,000.... ... Notes payable ..............................................
Creditor's Claim
Unsecured Liabilities
P210,000
Unsecured creditor with priority: Accrued wages ............................................ P 7,200 Accrued property tax ................................... ___6,600 Total ............................................................ Unsecured creditor: 960,000.... ... Account payable.......................................... Accrued expenses ........................................ 300,000.... ... Capital stock __369,000.... ... Retained earnings ............................................ P1,839,000
Total ................................................................
P 13,800
P960,000 6,300 _______ P966,300
142
Chapter 7
Problem 7 – 5 a.
b.
Total fair value of assets (estimated proceeds) .......................... Less: Fully and partially secured creditors claim: Notes payable, interest (secured by receivable and inventory) ................................................................... 125,000 Bonds payable (secured by land & building) .................... 231,000
P471,000
Available to unsecured creditors................................................ Less: Unsecured creditors with priority: Wages payable .................................................................. P 9,500 Taxes payable .................................................................... __14,000
115,000
__23,500
Amount available to unsecured creditors ...................................
P 91,500
Unsecured portion of notes payable and interests (P195-P125) Accounts payable .......................................................................
P 70,000 __95,000
Total claims of unsecured creditors ...........................................
P165,000
356,000
P91,500 ––––––– = 55.45% P165,000 c.
Distribution of P471,000:
Creditors Accounts payable Wages payable Taxes payable Notes payable & interests Bonds payable & interests
Amount
Percent Realized
Total Payment
P 95,000 .... 9,500 .... 14,000..... 125,000 .... 70,000 231,000 ....
55.45% 100% 100% 100% 55.45% 100%
P 52,678 9,500 14,000 125,000 38,815 _231,000
Total estimated payment ........................................
P470,993
Corporation in Financial Difficulty – Liquidation
143
Problem 7 – 6
1.
Evergreen Company Statement of Affairs June 30, 2011
Book Values P460,000
Estimated Realizable Values
ASSETS : Pledged with f ul ly secur ed creditor s Land and building ..................................... Less: Mortgage payable (including accrued interest)
P340,000 (330,000)
Available for Unsecured Creditors
P 10,000
F r ee Assets:
80,000 140,000 100,000 120,000 100,000
Cash ......................................................... Accounts receivable – net ......................... Inventories ................................................ Machinery – net ........................................ Goodwill ...................................................
P 80,000 126,000 84,000 40,000 _ _____0_
330,000
Total free assets ........................................ ................... Less: liabilities with priority ..................... ...................
340,000 _140,000
Net fr ee assets .......................................... ...................
200,000 _130,000
Estimated deficiency (Squeeze figure) ..... ................... P1,000,000
P330,000 LIABILITIES AND STOCKHOLDERS' EQUITY Secured & Priority Claims
Unsecured Non-priority Liabilities
L iabili ties with pri ority
P120,000 20,000
Wages payable .......................................... Property taxes payable ..............................
P120,000 __20,000
Total .........................................................
P140,000
F ul ly secured creditors
300,000 30,000
Mortgage payable ..................................... Interest on mortgage payable ....................
300,000 __30,000
Total .........................................................
P330,000
Un secur ed creditor s
220,000 100,000 10,000
Accounts payable ...................................... ................... Note payable-unsecured............................ ................... Interest payable-unsecured ....................... ...................
P220,000 100,000 10,000
Stockholders' Equi ty
400,000 Capital stock ............................................. (200,000) Retained earnings (deficit) ........................ ...................
___ P330,000
P1,000,000 2.
Settlement per peso of unsecured creditors is P.6250 (P200,000/P320,000). No payment is made for the P10,000 unsecured interest claim.
144 ____
Chapter 7
Problem 7 – 7 1.
Entries on trustee's books. 2011 March 1: Cash ............................................... ....... P8,000 Accounts receivable – net .............. ........ 16,000 Inventories ..................................... ........ 72,000 Land ............................................... ........ 40,000 Buildings – net ............................... ...... 200,000 Intangible assets ............................ ........52,000 Accounts payable..................... ................... Note payable............................ ................... Deferred revenue..................... ................... Wages payable......................... ................... Mortgage payable ................... ................... Estate equity ............................ ................... To record custody of Kimerald Corporation.
March 1 to 31: Cash ............................................... ........ 15,200 Estate equity................................... ............. 800 Accounts receivable-net .......... ................... To record collection of receivables and recognize loss. Cash ............................................... ........ 38,800 Estate equity................................... ........33,200 Inventories ............................... ................... To record sale of inventories at a loss. Cash ............................................... ...... 180,000 Estate equity................................... ........60,000 Land......................................... ................... Buildings-net ........................... ................... To record sale of land and buildings at a loss. Estate equity................................... ........52,000 Intangible assets ...................... ................... To write off intangible assets. Estate equity ......... ............................... ......... 16,400 Administrative expenses payable .. ....................
To accrue trustee expenses.
P100,000 80,000 2,000 6,000 160,000 40,000
16,000
72,000
40,000 200,000
52,000
16,400
Corporation in Financial Difficulty – Liquidation
145
Problem 7-7, continued:
2.
Financial Statements Kimerald Corporation in Trusteeship Statement of Financial Position March 31, 2011
Assets Cash ..................... ................................................. ...................
P242,000
Liabilities and Deficit Accounts payable . ................................................. ................... Note payable-unsecured......................................... ................... Revenue received in advance ................................. ................... Wages payable ..... ................................................. ................... Mortgage payable ................................................. ................... Administrative expense payable-new .................... ...................
P100,000 80,000 2,000 6,000 160,000 __16,400
Total liabilities ..... ................................................. ................... Less: Estate deficit ................................................. ...................
P364,400 _122,400
Total liabilities net of deficit .................................. ...................
P242,000
Kimerald Corporation in Trusteeship Statement of Cash Receipts and Disbursements March 1 to 31, 2011
Cash balance, March 1, 2011 ................................. ................... Add: Cash receipts Collections of receivables ............................. ..... P 15,200 Sale of inventories ......................................... ........ 38,800 Sale of land and buildings ............................. ...... 180,000 Total ..................... ................................................. ................... Less: Cash disbursements ...................................... ................... Cash balance, March 31, 2011 ............................... ...................
P
8,000
_234,000 242,000 ____ – 0 – P242,000
Kimerald Corporation in Trusteeship Statement of Changes in Estate Equity March 1 to 31, 2011
Estate equity, March 1 ........................................... ................... Less: Loss on uncollectible receivables.................. ....... P 800 Loss on sale of inventories ............................ ........ 33,200 Loss on sale of land and buildings ................ ........ 60,000 Loss on write off of intangibles .................... ........ 52,000 Administrative expenses ............................... ...... _16,400
P 40,000
Estate deficit, March 31 ......................................... ...................
P122,400
_162,400
146
Chapter 7
Problem 7-7, continued:
3.
Entries on trustee's books:
2011 April: Mortgage payable ..................................... ...... 160,000 Cash.................................................. ................... To record payment of secured creditors from proceeds from sale of Land and buildings. Administrative expenses payable-new...... ........ 16,400 Deferred revenue ...................................... .......... 2,000 Wages payable .......................................... .......... 6,000 Cash.................................................. ................... To record payment of priority liabilities. Accounts payable ...................................... ........ 32,000 Note payable-unsecured............................ ........ 25,600 Cash.................................................. ................... To record payment of P.32 per peso to unsecured creditors (available Cash of P57,600 divided by unsecured claims of P180,000). Accounts payable ...................................... ........ 68,000 Note payable-unsecured............................ ........ 54,400 Estate equity ..................................... ................... To write-off remaining liabilities and close trustee's records.
160,000
24,400
57,600
122,400
