Since 1977

AFAR DE LEON/DE LEON/DE LEON

QUIZ 2 SET A BATCH: M A Y 2018

Because of inability to pay its debts, the Nopay a. P85,000

b. P70,000
Manufacturing Company has been forced into c. P75,000
bankruptcy as of April 1, 2009. The balance sheet on d. P49,000
the date shows:
Assets Liabilities & Equity 5. The amount to be paid to partially secured creditors is
Cash P 2,700 Accounts Payable P 52,500 a. P65,000
Accounts 39,350 Notes Payable- 15,000 b. P50,000
Receivable Bank c. P60,500
Notes 18,500 Notes Payable- 51,250 d. P55,000
Receivable Suppliers
Merchandise 87,850 Accrued Wages 1,850 6. The amount to be paid to unsecured creditors is
Invty. a. P90,000
Prepaid 950 Accrued Taxes 4,650 b. P63,000
Insurance c. P49,500
Land and 61,250 Mortgage Bonds 90,000 d. None
Buildings Payable
Equipment 48,800 Common Stock- 75,000 7. The expected recovery rate is

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P100 par a. 100%

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Retained Earnings (30,850) b. 70%
c. 55%

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Total P259,400 Total P259,400
eH w d. 50%
Additional information:
Platt Company has been forced into bankruptcy and

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a. Accounts receivable of P16,950 and notes receivable of
P12,500 are expected to be collectible. The good notes liquidity. Unsecured claims will be paid at the rate of P0.50
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are pledged to the bank. on the peso. Maga Company holds a noninterest-bearing
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b. Merchandise inventory are expected to bring in
P45,100 when sold under bankruptcy conditions.
c. Land and buildings have an appraised value of
P95,000. They serve as security on the bonds.
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not receivable from Platt in the amount of P50,000,
collateralized by machinery with a liquidation value of
P10,000.
8. The total amount to be realized by Maga on this note

d. The current value of the equipment, net of disposal receivable is:

cost is P9,000. a. P35,000 c. P 30,000
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b. P 25,000 d. P 10,000
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1. The estimated net loss/net gain on asset disposal is:

a. P 33,750 Drake Company filed a voluntary bankruptcy petition
b. P 78,150 on July 15, 2009 and the statement of affairs reflects the
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c. P111,900
d. P 77,200 following amounts:
ed d

BookEst.Value Current Value

Assets
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2. The estimated payment to partially secured liabilities

a. P10,200 Assets pledged with
b. P14,175 fully secured
c. P10,050 creditors P 160,000 P190,000
d. P14,200 Assets pledged with
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partially secured
AB Corporation filed a voluntary bankruptcy petition on creditors 90,000 60,000
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August 1, 2009, and the statement of affairs reflects the Free assets 200,000 140,000
following information:
Book value Fair MV Liabilities
Assets pledged for fully secured Liabilities with
liabilities P100,000 P85,000 priority 20,000
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Assets pledged for partially Fully secured

secured liabilities 85,000 55,000 creditors 130,000
Free assets 90,000 50,000 Partially secured
Unsecured liabilities with creditors 100,000
priority 10,000 Unsecured creditors 260,000
Fully secured liabilities 70,000
Partially secured liabilities 65,000 Assume that the assets are converted into cash at the
Unsecured liabilities without 90,000 estimated current values.
priority 9. What amount of cash should the partially secured
creditors receive?
3. The amount that will be paid to creditors with priority is a. P 60,000 c. P 90,000
a. P10,000 b. P 84,000 d. P 100,000
b. P 7,000
c. P 8,000 10. On November 1, 2015, Goodbye To You (GTY) Inc.’s
d. P 7,500 trustee prepares a Statement of Affairs with the
4. The amount to be paid to fully secured creditors is following information:

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www.prtc.com.ph Quiz 2A
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 EXCEL PROFESSIONAL SERVICES, INC.

 P340,000 cash will be received by the unsecured
creditors whose claims totaled P1,360,000
 A received a 12% note of P124000 from GTY on
March 1, 2015, secured with machinery with a
market value of P115,000
 GTY issued to B a 12%, 1-year note of P136,000 on
January 1, 2015. Nothing has been pledged to this
note.
 C holds a note of P137,500 on which interest of
P7,452 is accrued, secured with equipment with a
book value of P153,000. The fair value of the
equipment is determined to be P173,250
 GTY still owes D, its cashier, with her salary worth
P12,220
Which of the following statements about the creditors
of Goodbye To You is false?
a. The unsecured creditor without priority will receive
P37,400
b. The unsecured creditor with priority will receive
P3,055
At December 31, 2011, 2012 and 2013, in accordance
with Section 27 Impairment of Assets, management
assessed the fair values of its investment in entity Z as
CU102,000, CU110,000 and CU90,000 respectively.
Costs to sell are estimated at CU4,000 throughout.
Entity A measures its investment in entity Z on 31
December 20X1, 20X2 and 20X3 respectively at:
a. P102,000, P110,000, P90,000.
b. P101,000, P101,000, P90,000.
c. P98,000, P106,000, P86,000.
d. P98,000, P101,000, P86,000
12. Assuming, a published price quotation exists for entity
Z and the entity uses the Fair Value Model. Entity A
measures its investment in entity Z on 31 December
2011, 2012 and 2013 respectively at:
a. P102,000, P110,000, P90,000.
b. P101,000, P101,000, P90,000.
c. P98,000, P106,000, P86,000.
d. P98,000, P101,000, P86,000.
MENCHU and OSANG in a joint venture, contributed
P24,000 each in order to purchase canned goods which
were sold by lots at a closing-out sale. They agreed to
divide their profits equally and each shall record his
purchases, sales and expenses in his own books. After

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c. The fully secured creditor will be paid an amount of
selling almost all the canned goods, they wind up their

er as
P144,952
venture. The following are the venture transactions:
d. The partially secured creditor will be paid an

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amount of P119,730 eH w Joint Venture credit balances were OSANG, (P19,200) and
MENCHU, (P16,800). Expenses paid from Joint Venture cash
11. On December 31, 2011 entity A (an SME) acquired 30

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were P2,400 by OSANG and P3,120 by MENCHU. Cost of
per cent of the ordinary shares that carry voting rights
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unsold canned goods which OSANG and MENCHU agreed to
of entity Z for CU100,000. In acquiring those shares assume were P720 and P1,120 respectively.
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entity A incurred transaction costs of CU1,000.

13. The total sales of the joint venture were:
a. P 89,520 c. P 85,840
Entity A has entered into a contractual arrangement b. P 84,000 d. P 95,280
with another party (entity C) that owns
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14. In the final settlement, the amount due to OSANG

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including her investment was:

25 per cent of the ordinary shares of entity Z, whereby a. P42,200 c. P41,280
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entities A and C jointly control entity Z. b. P41,040 d. P42,480

Entity A uses the cost model to account for its On January 1, 2017, E, F, and G establish a joint
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arrangement to manufacture a product that they will share

investments in jointly controlled entities. A published
equally. They will each contribute P400,000. E and F are to
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price quotation does not exist for entity Z. contribute cash while G is to contribute a piece of
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equipment with a fair value of P400,000. In the books of G,

In January 2012 entity Z declared and paid a dividend the carrying value of the equipment is P370,000. Assume a
of CU20,000 out of profits earned in ten-year life for the equipment from this date.
15. On January 1, 2017, in G’s balance sheet, the
Equipment in JO account will be presented at
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20X1. No further dividends were paid in 2012, 2013 or a. P133,333 c. P200,000

2014. b. P123,333 d. P185,000
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www.prtc.com.ph Quiz 2A
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