ADANCE ACCOUNTING 1

Problem 1
The following information is available on June 1, 2017 to ABC Co. the company decided to file
bankruptcy
Carrying Value
Cash P 8,960
A/R-net, Current fair value, P40,320 pledged on P47,040 of N/P 103,040
Inventories 87,360
Machinery – net current fair value of P150,976 pledged on mortgage payable 239,680
Office supplies, current fair value of P5,600 4,480
Wages payable 12.992
Taxes payable 2,688
Accounts payable 134,400
N/P 89,600
Mortgage payable 112,896
C/S 224,000
RE (133,056)

Additional info:
a. Estimated liability to the trustee is P58,240.
b. A delivery van previously given to the supervisor was returned to the company. The fair market
value is P56,000.

Required:
1. Prepare a statement of affairs as of June 1, 2017.
2. Compute the estimated recoverable amounts to the different types of creditors in the event of
liquidation.
3. Prepare a statement of deficiency to unsecured creditors.