Problem 1: The following information are related to Terminal Corporation which is undergoing

liquidation:
1. Bonds payable amounting to P73,600 is secured by Inventory with book value of P123,000 and
net realizable value of 2/3 of the recorded amount.
2. Of the P195,600 accounts payable, P55,000 is secured by equipment with a carrying amount of
P76,800 which is 70% realizable.\
3. Building with a carrying amount of P129,000 has a net realizable value of P99,000.
4. Other unrecorded liabilities are accrued interest payable on bonds, P3,100; salaries payable,
P17,400; taxes payable, P11,600; and trustee’s fee, P8,500.
5. Cash available prior to liquidation amounts to P11,900.
6. Total assets of Terminal Corp. presented in the statement of financial position prior to liquidation
amounts to P480,000. Except for prepaid expenses and goodwill with recorded amounts of
P7,600 and P22,000, respectively, remaining assets other than those whose realizable values
were mentioned above have a realizable value of 60% of the recorded amount.
7. Total liabilities of Terminal Corp. presented in the statement of financial position prior to liquidation
amounts to P380,000.
Required: Prepare a statement of affairs to facilitate the corporate liquidation.

Problem 2: Almost Corporation is undergoing liquidation and has the following condensed statement
of financial position as of January 1, 2020:

The equipment loan payable is secured by the plant assets having a book value of P300,000 and a
realizable value of P350,000. Of the accounts payable, P40,000 is secured by inventory which has a
cost of P40,000 and a liquidation value of P44,000. The balance of inventory has a realizable value of
P32,000. Receivables with a book value and market value of P100,000 and P80,000, respectively,
have been pledged as collateral on the business loan payable. The balance of the receivables has a
realizable value of P150,000. Liabilities not reflected on the balance sheet are accrued interest on
equipment loan payable of P5,000; taxes payable of P6,000; and liquidation fees payable of P4,000.
Question 1: What is the estimated deficiency to unsecured creditors?
Question 2: What amount will be received by each type of creditor at the end of the liquidation
process? (i.e., fully secured, partially secured, unsecured with priority, unsecured without priority)

Problem 3: Madigan Corp. has been undergoing liquidation since January 1. As of June 30, its
condensed statement of realization and liquidation is presented below:

Question 1: The net gain (loss) on liquidation for the 6-month period ending June 30 is:
Question 2: What is the ending cash balance assuming that common stock and deficits have ending
balances of P1,500,000 and P500,000, respectively?

Problem 4: Citymall Inc. has declared bankruptcy and has begun to liquidate. Unsecured claims will
be paid at the rate of 40 cents on the peso. A creditor holds a noninterest-bearing note receivable
from Citymall Inc. in the amount of P65,000, collaterized by machinery with a book value of P19,500
and liquidation value of P16,250. The total amount paid to the creditor is: