Note payable (short-term)
Note payable (long-term)
Retained earnings (deficit)
· The note payable (short-term) is secured by the inventory and the note payable (long-term) is secured by the land and building.
· Marketable securities have a fair value of P35,000 and dividends of P1,000 are due from this investment.
· Only P15,000 can be collected from the accounts receivable.
· Inventory can only be sold at P48,500.
· Prepaid expenses include a refund of P1,000.
· The intangible assets have no resale value.
· Fair value of land and building P238,000 and fair value of equipment P58,000.
· Administrative expenses of P31,500 are estimated as liquidation expenses.
· Salaries of P12,000 and payroll taxes of P3,000 are accrued.
· Interest on the long-term note payable of P8,000 has not been accrued.
1. How much is the estimated deficiency?
2. What is the estimated recovery percentage?
3. What is the estimated recovery for partially secured creditors?
4. How much is the estimated recovery for unsecured creditors without priority?
5. What is the amount of net free assets?
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