Reference no: EM133052009

Question - 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	Debit	Credit
Cash	P6,000
Accounts receivable	63,000
Allowance for bad debts		P2,000
Notes receivable	50,000
Accrued interest on notes receivable	1,200
Inventory	60,000
Buildings	182,000
Accumulated depreciation-Buildings		63,000
Equipment	14,600
Accumulated depreciation-Equipment		1,400
Prepaid insurance	1,100
Goodwill	8,500
Accrued wages		6,000
Taxes payable		2,400
Accounts payable and other liabilities		170,000
Notes payable		80,000
Accrued interest payable		1,600
Common stock		110,000
Retained earnings (deficit)	50,000
Total	P436,400	P436,400

The assets are expected to bring cash on conversion in the following amounts

Accounts receivable	P50,000
Notes receivable including P1,000 accrued interest	40,800
Building	75,000
Prepaid insurance	400

The inventory can be sold for P30,000 and is expected to incur shipping costs and selling expenses amounting to P1,000. Fair market value of the equipment amounted to P4,200.

The notes receivable are pledged as a security on a note payable of P40,000. A note payable of P20,000 is secured by a lien on the building, and the equipment is pledged as security on a note payable of P10,000. One-half of the interest payable relates to P40,000 note payable; the other half of the interest payable relates to the P20,000 note payable. There is no accrued interest on the other notes payable.

Accounts payable and other liabilities include debts, taxes and assessments due to the National Government amounting to P10,000.

The books do not show the estimated trust fees, accounting and legal fees, amounting to P5,000, which will be incurred in connection with the liquidation.

Required - Compute the payment to each class of creditor.