Problem A

Malat a Lelut Corporation filed a voluntary petition for bankruptcy on January 2013. On March 31, 2013, the trustee provided the following information about the corporations financial affairs: Book Values Estimated Realizable Values
Cash P 40,000 P 40,000

AR net
Inventories Plant assets net Liabilities for priority claims

200,000
300,000 500,000

150,000
140,000 560,000 160,000

AP unsecured
Notes payable, secured by AR Mortgage payable, secured by all Plant assets
1.

300,000
200,000 440,000

Total free assets is _________________.

2.
3. 4. 5.

Estimated deficiency per peso is __________________.

Liabilities with priority creditors will receive ___________________. Estimated payment to creditors is ______________________. The amount to be credited to estate deficit is ______________________.

Problem B

Banging Nasi Corporation that was to be liquidated had the following liabilities:
Income taxes Notes land Accounts payable payable secured P 10,000 by 100,000 51,050

Salaries payable (P10,950 for Employee 1 and P2,000 for Employee 2) 12,950 Administrative expenses for liquidation 20,000

The company had the following: Value

Current assets Land

Book
Fair Value P 95,000 75,000 50,000

P 100,000

Building
6. 7. 8.

150,000

200,000

Net free assets is calculated to be what amount? Liabilities with priority are calculated to be what amount? Unsecured liabilities are calculated to be what amount

Problem C

The following information was available on March 31, 2013 for Makalawang a Danum Corporation, which they cannot pay their liabilities when they are due:
Cash Inventories: NRV P72,000 pledged on P84,000 NP pledged on mortgage note Payable Plant assets: Fair value P207,500 P 16,000 Wages payable Accounts Payable 156,000 Notes Payable Mortgage Payable on 536,000 Interest 1,600 8,000 P 23,200 4,800 240,000 160,000 200,000 Mortgage Accounts Receivable - worthless184,000 Property taxes payable

Accumulated depreciation
Supplies: Fair value P6,000
11.

108,000 Interest on Property Taxes

300

Total free assets is calculated to be what amount?

12.
13. 14. 15.

Expected recovery percentage is?

How much would be paid to wages? How much would be paid to the BIR? How much would notes payable creditors receive?

Answers
1. 2. 3. 4. 5. 6. 7.

8.
9. 10. 11.

12.
13. 14. 15.

300,000 P0.60 160,000 890,000 210,000 252,050 42,950 76,050 100% None 27,900 0% 23,200 4,700 72,000