PROBLEM 5
The following data are taken from the statement of affairs of the John Company. Assets pledged with fully f ully secured creditors (realizable value, P190,00 0) Assets pledged with pa rtially secured creditors cred itors (realizable value, P90,000) Free assets (realizable value, P102,000) Fully secured creditor claims Partially secured creditor claims Unsecured creditor claims with priority General unsecured creditor claims
P240,000 P110,000 P160,000 P91,000 P120,000 P30,000 P350,000
What is the amount that will be paid to partially secured creditors? a.P98,500 b.P103,500 c. P108,500 d. P109,500 Answer: B Solution:
Realizable Value of all Assets (P190,000 + P90,000 + $102,000) Allocated to: Fully secured creditors Partially secured creditors Unsecured creditors with priority Remainder available to general unsecured creditors
(91,000) (90,000) (30,000) P171,000
Payment rate to general unsecured creditors (Including balance due to partially secured creditors) P171,000 / (P350,000 + (P120,000 - P90,000))
45%
Amounts to be paid to: Fully secured creditors Partially secured creditors [P90,000 + .45(P30,000)] Unsecured creditors with priority General unsecured creditors [.45(P350,000)] [.45(P350,000) ] Total
P382,000
P 91,000 103,500 30,000 157,500 P382,000
PROBLEM 6
Joseph. filed a voluntary bankruptcy petition on August 15, 2014, and the statement of affairs reflected the following amounts: Estimated Book Current Value Value Assets Assets pledged with full secured creditors P 900,000 P1,110,000 Assets pledged with partially secured creditors 540,000 360,000 Free assets 1,260,000 960,000 Total P2,700,000 P2,430,000 Liabilities Liabilities with priority Fully secured creditors Partially secured creditors Unsecured creditors Total
P 210,000 780,000 600,000 1,620,000 P3,210,000
Assume that the assets are converted to cash at the estimated current values and the business is liquidated. What amount of cash will be available to pay unsecured non-priority claims? A. B. C. D.
720,000 840,000 960,000 1,080,000
Answer : D Solution:
Estimated current values of assets pledged with fully secured creditors Add: Estimated current value of free assets Total Less Liabilities: Full secured creditors With priority Total cash available for unsecured claims
P1,110,000 960,000 P2,070,000 P780,000 210,000
990,000 P1,080,000
