ENABLING ASSESSMENT

1. Hikahos Corporation is undergoing liquidation. Relevant information as of January 1, 2021 is shown

below:

ASSETS Carrying Amount Net Realizable Value

Cash 200,000 200,000

Accounts Receivable 500,000 450,000

Equipment-net 600,000 150,000

Land 1,000,000 1,300,000

Total Assets 2,300,000 2,100,000

LIABILITIES

Accounts Payable 700,000 700,000

Salaries Payable 800,000 800,000

Notes Payable 500,000 500,000

Loan Payable 750,000 750,000

Total Liabilities 2,750,000 2,750,000

EQUITY

Share Capital 1,000,000

Deficit (1,450,000)

Capital Deficiency (450,000)

Total Liabilities and Equity 2,300,000

Additional information:

❏ Administrative expenses expected to be incurred during the liquidation process is P180,000.

❏ The equipment is pledged as collateral security for the notes payable.
❏ The land is pledged as collateral security for the loan payable.

● The estimated recovery percentage is ___.

20.95%

● Assuming all the assets were sold, and all the liabilities were settled, Ms. E, an unsecured and
non-priority creditor would expect to receive from her P500,000 claim from Hikahos Corporation
an amount equal to ___.
104762

● The net free assets amount to ___.

 220000

● The estimated deficiency is ___.

830000