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Problem 1.
The Global Corporation is undergoing liquidation and has the following condensed
statement of financial position as of January 1, 2013:
ASSETS
LIABILITIES AND SHE
Cash
P114,200 Salaries Payable
P50,000
Receivables, net
340,800 Accounts Payable
108,500
Inventory
80,000 Mortgage Payable
400,000
Prepaid expenses
2,500 Loan Payable
220,000
Building (net)
345,000 Note Payable
80,000
Goodwill
55,000 Ordinary shares
120,000
Deficit
(41,000)
Total Assets
P 937,500
P 937,500
The mortgage payable is secured by the building having a realizable value of
P360,000. Accounts payable amounting to P60,000 is secured by receivables
amounting to P85,200 which is collectible in the amount of P68,160. The balance in
the book value of the receivables which has a realizable value of P235,000 is used
to secure the loan payable. The inventory has a realizable value of P53,000. In
addition to the recorded liabilities are accrued interest on mortgage payable
amounting to P4,000, liquidation expenses amounting to P9,5000 and taxes
amounting to P4,000. (use two decimal places for the recovery percentage)
Which of the following statements is wrong?
A. The estimated deficiency to unsecured creditors is P45,640.
B. Payment to partially secured creditors is P392,358.
C. Payment to unsecured creditors without priority is P94,499.
D. Estimated loss on asset realization is P107,140.
Problem 2.
The following data are provided by Worldwide Corporation which is undergoing
liquidation process:
Total liabilities amounts to P692,000. 35% is fully secured by assets amounting
to P270,000 with fair market value of P250,000; 40% is partially secured by
assets amounting to P300,000 with a realizable value of P225,000; and the
remaining balance is unsecured.
Total assets amounts to P890,000 and has a total fair market value P695,000
Unpaid income taxes amounts to P35,000. Additional salaries payable and
administrative expenses totalled P28,000
Deficit amounts to P79,000
Which of the following statements is correct?
A. Assets available to all unsecured creditors with and without priority is
P227,800
B. The amount paid to partially secured creditors is P225,000
C. The estate deficit amount to P60,000
D. The amount paid to all secured creditors is P695,000
Problem 3.
A review of the assets and liabilities of Atlantis Corporation in bankruptcy on Nov.
30, 2013, discloses the following:
A mortgage payable of P77,000, is secured by building valued at P14,000 more
than its book value of P68,000
Notes payable of P39,000 is secured by furniture and equipment with book value
of P46,000 that is estimated to be 4/5 realizable
Assets other than those referred to have estimated value of P25,000, an amount
that is P6,000 above its book value
Liabilities other than those referred to total P31,000, which excluded claims with
priority of P8,000
Which of the following statements is true?
A. Actual recovery percentage is 66.27%
B. Total free assets is P22,000
C. Estimated deficiency to unsecured creditors is P11,200
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D. Payment to partially secured creditors amount to P36,800

Problem 4.
Twisted Corporation is undergoing liquidation. The trustee of Twisted Corp.
presented the following information: Assets amounting to P125,000 are available to
unsecured liabilities without priority. Assets amounting to P110,000 represents
assets originally not pledged to any liabilities. Unpaid liabilities are as follows:
administrative expenses, P21,000; taxes, P18,000 and wages, P32,000. Accounts
payable and notes payable totalled P180,000. No assets were pledged on the said
liabilities. Payment to fully secured creditors and partially secured creditors amounts
to P139,000 and P144,000 respectively. The expected recovery percentage is 40
percent.
Amount of assets pledged to fully secured creditors
A. P139,000
B. P225,000
C. P235,000
D. P249,000
Total liabilities
A. P522,500
B. P534,000
C. P613,500
D. P580,000
The amount to be paid to all creditors
A. P426,000
B. P187,500
C. P479,000
D. P210,000
Problem 5.
The following data were taken from the statement of realization and liquidation of
intercontinental Corporation for the quarter ended June 30, 2013
Assets to be realized
P515,625
Supplementary credits
796,875
Liabilities to be liquidated
843,750
Supplementary charges
731,250
Liabilities liquidated
562,500
Assets acquired
562,500
Assets realized
656,250
Liabilities assumed
281,250
Assets not realized
234,375
The ending capital balances of capital stock and retained earnings are P648,750 and
P178,500, respectively. A net loss of P226,500 for the period.
How much is the ending balance of cash?
A. P1,125,000
B. P1,260,000
C. P978,750
D. P807,000
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