Reference no: EM132768938
Question - Troublesome Corporation filed a petition for voluntary liquidation and was approved by the court on October 1, 2020. You are now hired by the appointed liquidator to assist him in determining the amount of payout to creditors. You obtained the following information.
Book Value Estimated Realizable Value
Cash P40,000 P40,000
Accounts receivable-net 240,000 200,000
Inventory 4400,000 280,000
Equipment-net 280,000 280,000
Land 80,000 160,000
Building-net 800,000 600,000
Goodwill 168,000 P2,048,000
Accounts payable P480,000
Wages and salaries payable 120,000
Pension plan payable 80,000
Taxes payable 320,000
Interest payable 48,000
Note payable 400,000
Mortgage payable 400,000
Share capital 280,000
Deficit (80,000) P2,048,000
Interest payable includes P40,000 from the mortgage payable and P8,000 from the note payable. The land and building are pledged as security for the mortgage payable as well as any accrued interest on the mortgage. The note payable is secured with the equipment, but the interest on the note is unsecured. Liquidation expenses are expected to be P200,000.
Required -
a. Make statement of affairs as of October 1, 2020.
b. Compute the estimated recovery ratio.
c. Handsome Corporation was a supplier to Troublesome Corporation and at the time of Troublesome's liquidation filing, Handsome's account receivable from Troublesome was P160,000. On the basis of the estimates, how much can Handsome expect to receive?
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