Reference no: EM132995708

The balance sheet of Evergreen Company at June 30, 2012 contains the following items:

Assets

Cash P 80,000

Accounts receivable (net) 140,000

Inventories 100,000

Land 260,000

Building - net 200,000

Machinery - net 120,000

Patent 100,000

Total P1,000,000

Liabilities and Stockholders' Equity

Accounts Payable P 220,000

Wages Payable 120,000

Taxes Payable 20,000

Mortgage Payable 300,000

Interest on Mortgage Payable 30,000

Notes Payable - unsecured 100,000

Interest Payable - unsecured 10,000

Capital Stock 400,000

Retained Earnings (deficit) (200,000)

Total P1,000,000

The company is in financial difficulty, and its stockholders and creditors have requested a statement of affairs for planning purposes. The following information is available:

1. The company estimates that P126,000 is the maximum amount of collectible for the accounts receivable.
2. Except for 20% of the inventory items that are damaged and worth only P4,000, the cost of other items is expected to be recovered in full.
3. The land and building have a combined appraisal value of P340,000 and are subject to the P300,000 mortgage and related accrued interest.
4. The appraised value of the machinery is P40,000.

Compute the following:

Question 1: How much is the net free assets?

Question 2: How much is the total unsecured liabilities with priority?

Question 3: How much is the total unsecured liabilities without priority?

Question 4: Compute the estimated settlement per peso of unsecured creditors