Page 1 of 5 | Corporate Liquidation - Problems Answer Key

1.
Accounts payable 100,000 pledged by 50,000 receivable
Notes payable 50,000
Accrued Expenses 100,000
Salaries payable 50,000
Taxes payable 20,000

How much is the total unsecured liabilities without priority? 200,000

2.
Cash 100,000
Accounts Receivable 50,000
Notes Receivable 150,000 pledged to 100,000 Loans payable
Inventories 100,000
Building 500,000 pledged to 800,000 loans payable
Patent 100,000

How much is the total free assets? 400,000

3.
Cash 100,000
Accounts Receivable 50,000
Notes Receivable 150,000 pledged to 100,000 Loans payable
Inventories 100,000
Building 500,000 pledged to 800,000 loans payable
Patent 100,000
Other liabilities:

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Salaries payable 100,000
Taxes payable 200,000
Bank loans 500,000
Accounts Payable 100,000
How much is the estimated deficiency to unsecured creditors? 800,000

4.
Cash 100,000
Accounts Receivable 50,000
Notes Receivable 150,000 pledged to 100,000 Loans payable
Inventories 100,000
Building 500,000 pledged to 800,000 loans payable
Patent 100,000
Other liabilities:
Salaries payable 100,000
Taxes payable 200,000
Bank loans 500,000
Accounts Payable 100,000
How much is the net free assets? 100,000

7.
Cash 100,000
Accounts Receivable 50,000
Notes Receivable 150,000 pledged to 100,000 Loans payable
Inventories 100,000
Building 500,000 pledged to 800,000 loans payable

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Patent 100,000
Other liabilities:
Salaries payable 100,000
Taxes payable 200,000
Bank loans 500,000
Accounts Payable 100,000
How much is the partially secured liabilities? 800,000

6. Cash 100,000
Accounts Receivable 50,000
Notes Receivable 150,000 pledged to 100,000 Loans payable
Inventories 100,000
Building 500,000 pledged to 800,000 loans payable
Patent 100,000
Other liabilities:
Salaries payable 100,000
Taxes payable 200,000
Bank loans 500,000
Accounts Payable 100,000
Administrative expense paid to trustee 50,000
Rent payable 50,000
Accrued Employee Benefit 20,000
Real property tax 10,000
How much is the unsecured liabilities with priority? 380,000

7.
Cash 100,000

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Accounts Receivable 50,000
Notes Receivable 150,000 pledged to 100,000 Loans payable
Inventories 100,000
Building 500,000 pledged to 800,000 loans payable
Patent 100,000
Other liabilities:
Salaries payable 100,000
Taxes payable 200,000
Bank loans 500,000
Accounts Payable 100,000
How much is the estimated total payment to the total partially secured liabilities? 533,333

8.
Cash 100,000
Accounts Receivable 50,000
Notes Receivable 150,000 pledged to 100,000 Loans payable
Inventories 100,000
Building 500,000 pledged to 800,000 loans payable
Patent 100,000
Other liabilities:
Salaries payable 100,000
Taxes payable 200,000
Bank loans 500,000
Accounts Payable 100,000
How much is the percentage of payment to fully secured creditors? 100%

9.

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The following data came from the statement of affairs of Manalo World Corporation:
Cash 1,000,000
Accounts Receivable 1,000,000
Inventories 300,000
Land 2,000,000
Building 1,000,000

In the middle of liquidation, all receivables were collected and Inventories were sold for 500,000. How much is the
total assets not realized after the transactions that occured? 3,000,000
10.
The following data were extraced from Mega City Corporation:
Accounts Payable 100,000
Notes Payable 200,000
Taxes Payable 300,000
Salaries Payable 100,000

During liquidation, Salaries payable were paid and unrecorded rent payable amounting to 50,000 were discovered.
After the activities mentioned, how much is the total liabilities not liquidated? 650,000