Corporate Liquidation

RA 10142 FRIA
Title XIX of Civil Code Commerce and preference of credits

Voluntary court
Involuntary 3 or more crecitors whose aggregate claims is at least 1M of

Statement of Affairs
Determine NRV sa Assets
collateral/pledge/mortgage/encumberred

Determine claims.
FS
PS
Unsecured
Credits in order of prio Encumberred AsPortion of free A NFA
FS 100% - -
PS 100% - Pro-rate
Unsecured w/ prio - 100% -
Unsecured w/out prio - - Pro-rate

Unsecured w/prio
Art. 2244 CC Amended by Art. 100 of the labor code
Preference:
Salaries
Damages for laborers
Fines and claims
Expenses Legal and admin expense carry out of liquidation
Taxes Due National or local taxes
Damages for Quasi delict
Gift
Certain credits Note Payable w/ public inst Uns. w/ prio
private instrumenUns. w/out prio

Uns. w/out prio

ERP NFA/total uns. w/out prio
Est. Recovery percentage

EDGUC Net free assets less total unsecured credits w/out priority
Est deficiency for general uns. Creditors

Adminstrator T-account approach.

Dr. Cr.
NCA to be realized NCA realized
NCA acquired NCA not realized
Liab liquidated Liab to be liquidated
Liab not liquidated Liab acquired
Expense Supp. Debits Supp. Credits Income
 Debit>Credit Net Loss
Debit>Credit Net Income

Line by line approach

Supp credits xx 100
Supp debits (xx) - 70
net gain (loss) on realization xx - 20
Net gain (loss) on settlement xx 10
Net income (loss) xx 20

1.
Cash 10,435
AR
249,600 124,800
Invty
65,000 81,250
195,000 78,000
Prepaid -
Building
520,000 194,800
- 320,000
- 5,200
Taxes - 79,000
Salaries - 90,000
NP w/ public
60,100 - 60,100
NFA 260,185

2.
NP 59,900
AP
246,200 246,200
Total uns. w/out prio 306,100

ERP 0.85

PS 124,800
AP 371,000
185,500
PS 60,700 51,595
PS 176,395

3.
Salaries 90,000
NP 60,100
Taxes 79,000
uns. w/ prio 229,100
Uns w/out prio
AP 185,500
246,200
- 60,700
185,500
Private Instrument 59,900
Uns w/out prio 245,400
ERP 0.85
208,590
437,690

5.
ERP NFA/Total uns. w/prio Liab
85%

Algebrief
X= 120,120 - Y Uns w/out prio
Y = 126,000 - X PS

X = 120,120 - 126,000 - X * 0.85

X = 5880 + .85x
.15x = 5880
39,200 Uns w/out prio

Y = 126,000 - X PS
86,800 FV of the asset realized for PS

TOTAL NRV 397,740

Unencomberred assets - 147,000
Less: FV ni PS - 86,800
PLEDGE to FS 163,940
Secured portion 63,000
FV of the Pledge asset pertaining to FS 226,940

6.
FA 870,400
for PS 160,000
FS 256,000
TOTAL FA 1,286,400
Payments:
w/preference - 128,000
FS - 192,000
PS - 160,000 96,000 Uns. w/ out prio
- 480,000 1,056,000
NFA 806,400 1,152,000 Uns. w/ out prio
ERP 70%
67,200
227,200 PS
7.
Sobra sa FS payment 2,682,500
FA 2,757,800
FA 5,440,300
Less:
Uns. W/prio 1,125,000
NFA 4,315,300
Est Deficiency 5,492,200
Total uns. w/out prio 9,807,500
ERP 44%

Est payments 16,787,200

Payment to FS - 8,097,500
Preferred - 1,125,000
Payment to uns w/out prio* - 3,347,300
Payment to PS 4,217,400 <---ANSWER

Total uns. w/out prio 9,807,500 PS remaining

Remaing PS 2,200,000
uns. w/out prio 7,607,500
Payment to uns w/out prio* 3,347,300

8.

Loss on realization (350k - 315k) 35,000

Unrecorded Liab 5,000
Expense 15,000
Income - 10,000
Est. Net Loss 45,000

Assets (book value) 350,000

Liabilites 250,000
Equity 100,000

Est recoverable (100,000 - 45,000) 55,000

Est recovery/SHE (55k/100k) 0.55

9.
Asset (fair value) 315,000
Income 10,000
Total 325,000 325,000

Liab 400,000
Unrecorded Liab 5,000
Expense 15,000
Total 420,000 - 420,000
ANSWER: - 95,000

10.
 Cash 2,000
Invty 44,000 13,950 57,950
Payment to PS - 44,000 31,000 uns. w/out prio
Land 208,000 65,000
Payment to FS - 205,000 96,000
Dividend 500 45% ERP
Investment 19,600
AR 16,000
Uns. w/ prio - 24,900
Liab w.prio - 15,000
Equipment 42,000
NFA 43,200

Free Asset 136,500

Dividend - 500
Investment - 15,000
AR - 23,000
Prepayments - 18,000
Remaining Equipmet 80,000
42,000

Est Losses 52,500

Est gain - 5,000
Add liab 10,500
Add assets - 10,375
Loss 47,625
PROBLEM SHE* 45,000
Deficiency 2,625

15
*Est payments 167,875
Est loss 52,500
Est gain - 5,000
Add Asset - 10,375
BV assets 205,000
Liab 160,000
SHE 45,000

Deficiency 2,625
Deficiency Uns. w/out prio 2,325
Remaining deificiency PS 300
Total claims 18,500
PS 18,200

JOINT ARRANGEMENTS
Joint operation right to asset and liabilites
Joint venture right to net assets
Separate Vehicle a+b = c

Rules to identify whether JO or JV

* no SV = JO
*SV = JO and JV
SV corporation JV
SV Partnership JO
Limited partnership JV

JO Separate record a and b

JV isa ang recording]
a+b =c
c record

Contribution 40,000
JO 16,000
JO 18,400
Expenses 800
Expenses 1,800
Sales 77,000

Sales 77,000
COS (40,000-2800) - 37,200
Expense - 2,600
NI 37,200
A 18,600
B 18,600

A B
Contribution 20,000 20,000
Share in NI 18,600 18,600
Inventory taken - 600 - 2,200
Payment 38,000 36,400

Dr Cr
63,000 65,500
130 140
63,130 65,640
2,510

Kee Nee
Sales 48,700 16,800
Purchases - 45,000 - 18,000
Share in NI 1,255 1,255
Interest expense - 80 - 50
Dividend 40 100
4,915 105 5,020
4,810
2,405
20.
Investment 600,000
NI
168,000 168,000
Less: Dividends
60,000 - 60,000
708,000

21.
NI 140,000
56,000

22. 90,000 sales

54,000 cos
36,000 DGP
14,400

23.

Entity uses Cost model

published price quotation
FV model

Investment 300,000
NL 100000 - 30,000
Investment 270,000

SME FV

26.
FV 490,000
CA 140,000
UG 350,000

35,000

UG 315,000
RG 35,000
rence of credits

claims is at least 1M of 25% of SCS whichever is higher

liquidation

. w/out prio

redits w/out priority

100 80
110 100
lized for PS

. w/ out prio

. w/ out prio
w/out prio
2,510
2,405