Download P2_104_Consignment Sales and Corporate Liquidation_key Answers PDF

TitleP2_104_Consignment Sales and Corporate Liquidation_key Answers
TagsFinancial Accounting Economies Earnings Bankruptcy
File Size61.8 KB
Total Pages4
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Page 2

c. The consignor can recover unsold goods or the proceeds from sales from the consignee even though the,
latter becomes insolvent or bankrupt.

d. The risks of physical deterioration as well as price fluctuation are avoided.

COORPORATE LIQUIDATION

Problem 1. The following data were taken from the statement of realization and liquidation of Anne Company for the
quarter ended September 30, 2013:

Liabilities to be liquidated P1,425,000

Supplementary charges 845,500

Liabilities not liquidated 1,050,000

Supplementary credits 962,500

Assets acquired 680,000

Liabilities liquidated 790,000

Assets to be realized 537,500

Assets realized 875,000

Liabilities assumed 415,000

The beginning balances of ordinary shares and retained earnings are P510,000 and P148,000, respectively. The net
income for the period is P437,000. How much is the ending cash balance?

a. P1,545,500 b. P1,482,500 c. P1,045,500 d.
P1,465,000

Problem 2. The following information are related to John Loyd Corporation which is undergoing liquidation:

a. Bonds payable amounting to P73,600 is secured by merchandise inventory with book value of P123,000 and net
realizable value of 2/3 of recorded amount.

b. Of the P195,600 accounts payable, P55,000 is secured by equipment with carrying amount of P76,800 which is
70% realizable.

c. Building with carrying amount of P129,000 has a net realizable value of P99,000.
d. Other unrecorded liabilities are accrued interest on bonds, P3,100; salaries payable, P17,400; taxes payable,

P11,600 and trustee’s fee, P8,500.
e. Cash available prior to liquidation amounts to P11,900.
f. Total assets of John Loyd Corporation presented in the Statement of Financial Position prior to liquidation

amounts to P480,000. Remaining assets other than those whose realizable value were mentioned above have
NRV of 60% of recorded amount, except for prepaid expenses and goodwill amounting to P7,600 and P22,000,
respectively

g. Total liabilities of the company prior to liquidation amounts to P380,000.

Compute for the estimated deficiency to unsecured liabilities.
a. P108,120 b. P120,020 c. P90,360 d.

P67,520

Problem 3. Prive’ Company has been undergoing liquidation since January 1. As of June 30, its condensed
Statement of Realization & Liquidation is presented below:

Assets realized P105,000 Sales on account P17,500
Interest on investment 525 Assets not realized 147,000
Purchases 6,250 Liabilities not liquidated 111,475
Assets acquired 17,500 Sales for cash 87,500
Liabilities assumed 5,250 Assets to be realized 332,500
Payment of expenses of trustee 26,250 Liabilities liquidated 122,500
Liabilities to be liquidated 227,500

PARTNERSHIP ACCOUNTING - P2 104 Page 2

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