Quitter Co.

is undergoing liquidation solution

1. What is the total amount available for payment of claims of unsecured

creditors?

a. 210,000 c. 144,000
b. 160,000 d. 0
Available for unsecured
creditors
Free assets 160,000
Liabilities with priority (16,000)
Net free assets 144,000

2. What is the estimated amount of liquidating dividend per peso claim?

a. 1.17 c. 0.88
b. 1.03 d. 0.80

Unsecured portion of partially secured creditors 25,000

Unsecured creditors 155,000
Total unsecured liabilities without priority 180,000

Net free assets 144,000

Divide by: Total unsecured liabilities without priority 180,000
Recovery per peso 0.80

3. What is the amount of deficiency to creditors?

a. 36,000 c. 160,000
b. 144,000 d. 180,000

Assets pledged with partially secured creditors 50,000

Free assets 160,000
Liabilities with priority (16,000)
Partially secured creditors (75,000)
Unsecured creditors (155,000)
Deficiency (36,000)