Transcribed Image Text: CASE 4 Lugena Company has been forced into bankruptcy as of April 30 because of its inability to pay its debts. The statement of financial position on

Transcribed Image Text: CASE 4
Lugena Company has been forced into bankruptcy as of April 30 because of its inability to pay its debts. The
statement of financial position on that date shows:
ASSETS
LIABILITIES & EQUITY
P8,100
118,050
55,500
263,550
2,850
183,750
146,400
Accounts Payable
Notes Payable – BDO
Notes Payable – suppliers
Accrued wages
Accrued taxes
Cash
P157,500
45,000
153,750
5,550
13,950
270,000
225,000
(92,550)
P778,200
Accounts Receivable
Note Receivable
Inventory
Prepaid Expenses
Land and Building
Equipment, net
Mortgage Bonds Payable
Common stock – P100 par
Retained Earnings
Total Liabilities & Equity
Total Assets
P778,200
Additional information:
a. Accounts receivable of P48,330 and notes receivable of P37,500 are expected to be collectible. The good
notes are pledged to Banco De Oro.
b. Inventories are expected to bring in P135,300 when sold under bankruptcy conditions.
c. Land and buildings have an appraised value of P285,000. They serve as security on the bonds.
d. The current value of the equipment, net of disposal cost is P27,000.
e. Estimated legal and accounting fees for the liquidation are P3,000.
f. Unrecorded interest on notes payable to supplier amounts to P1,500.
Using the above data, compute the following:
11. Net free assets
12. Net gain (loss) on realization
13. Estimated oenciency
14. Net income (loss) on realization and liquidation
15. Amount paid to partially secured creditors
16. Total payment to unsecured creditors

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