MAGBATO, ELLA MAE R.
Module 2
Requirement 1 Miner Company
Statement of Affairs
May 31,20x4
Assets Realizable Value Available for unsecured
Assets pledged for fully secured creditors
119,000.00 Building 75,000.00
80,000.00 Notes Payable 20,000.00
800.00 Accrued Interest 800.00 54,200.00
50,000.00 Notes Receivable 39,800.00
1,200.00 Accrued Interest 1,000.00
40,000.00 Notes Payable 40,000.00
800.00 Accrued Interest 800.00 -
Assets pledged for partially secured creditors
13,200.00 Equipment 4,200.00
10,000.00 Notes Payable 10,000.00 -
Free Assets
6,000.00 Cash 6,000.00
61,000.00 Accounts Receivable 50,000.00
60,000.00 Inventory 30,000.00
1,100.00 Prepaid Insurance 400.00
8,500.00 Goodwill -
140,600.00
Priority Liabilities (8,400.00)
Net Free Assets 132,200.00
Estimated Deficiency 53,600.00
Total 185,800.00
Liabilities
Priority Liabilities
6,000.00 Accrued Wages 6,000.00
2,400.00 Taxes Payable 2,400.00
Total 8,400.00
Fully Secured Creditors
20,000.00 Notes Payable 20,000.00
800.00 Accrued Interest 800.00
total 20,800.00
Partially Secured
10,000.00 Notes Payable 10,000.00
13,200.00 Equipment (4,200.00)
5,800.00
Unsecured Creditors
170,000.00 Accounts Payable 170,000.00
10,000.00 Notes Payable 10,000.00
110,000.00 Stockholders Equity -
180,000.00
Total 185,800.00
Miner Company
Deficiency Statement
May 31, 20x4
Estimated Losses
Notes Receivable 10,200.00
Building 44,000.00
Equipment 9,000.00
Accounts Receivable 11,000.00
Inventory 30,000.00
Prepaid Insurance 700.00
Goodwill 8,500.00
Estimated Net Loss 113,400.00
Less: loss to be absorbed
by stockholders
Common stock 110,000
Deficit -50000
Est. Deficiency to unsecured 53,400.00
creditors
Requirement 2
Estimated dividend rate:
net free assets/ unsecured claims
= 132,200.00
185,800.00
= 0.711517761 ≈71.15%
PROBLEM 2
Requirement 1
Books of Trustee
Cash 16,000.00
Accounts Receivable 32,000.00
Inventories 144,000.00
Land 80,000.00
Building 400,000.00
Intangible Assets 104,000.00
Accounts Payable 200,000.00
Notes Payable 160,000.00
Deferred Revenue 4,000.00
Wages Payable 12,000.00
Mortgage Payable 320,000.00
Estate Equity 80,000.00
To record custody of assets and liabilities
at face value
A. Deferred Revenue 4,000.00
Cash 4,000.00
Wages payable 12,000.00
Cash 12,000.00
a Cash 28,800.00
Estate Equity 3,200.00
Accounts Receivable 32,000.00
b Cash 77,600.00
Estate Equity 66,400.00
Inventories 144,000.00
c Cash 400,000.00
Estate Equity 80,000.00
Land 80,000.00
Buildings 400,000.00
Mortgage Payable 320,000.00
Cash 320,000.00
d Estate Equity 104,000.00
Intangible Assets 104,000.00
e Estate Equity 32,800.00
Payable to Trustee 32,800.00
Payable to Trustee 32,800.00
Cash 32,800.00
Accounts Payable 85,333.00
Notes Payable 68,267.00
Cash 153,600.00
Accounts Payable 114,667.00
Notes Payable 91,733.00
Estate Equity 206,400.00
Books of Distressed Company
Accounts Payable 200,000.00
Notes Payable 160,000.00
Deferred Revenue 4,000.00
Wages Payable 12,000.00
Mortgage Payable 320,000.00
Trustee Account 80,000.00
Cash 16,000.00
Accounts Receivable 32,000.00
Inventories 144,000.00
Land 80,000.00
Building 400,000.00
Intangible Assets 104,000.00
To record custody of trustee of assets and libilities
Retained Earnings 3,200.00
Trustee Account 3,200.00
Retained Earnings 66,400.00
Trustee account 66,400.00
Retained Earnings 80,000.00
Trustee Account 80,000.00
Retained Earnings 104,000.00
Trustee Account 104,000.00
Retained Earnings 32,800.00
Trustee Account 32,800.00
Capital Stock 160,000.00
Trustee Account 206,400.00
Retained Earnings 366,400.00
Requirement 2
Breakthrough Enterprises
Statement of Realization
June 01, 2013.
Assets to be Realized: ASSETS Assets Realized:
Accounts receivable 32,000.00 Accounts Receivable 28,800.00
Inventories 144,000.00 Inventories 77,600.00
Land 80,000.00 Land and building 400,000.00
Building 400,000.00 Total 506,400.00
Intangible Assets 104,000.00
Total 760,000.00
Assets Acquired (new): Assets not realized:
LIABILITIES
Liabilities Liquidated: Liabilities to be liquidated:
Accounts Payable 85,333.00 Accounts Payable 200,000.00
Notes Payable 68,267.00 Notes Payable 160,000.00
Mortgage Payable 320,000.00 Mortage Payable 320,000.00
Deferred revenue 4,000.00 Wages Payable 12,000.00
Payable to Trustee 32,800.00 Deferred Revenue 4,000.00
Total 510,400.00 Total 696,000.00
Liabilities not liquidated: Liabilities incurred (new):
Accounts Payable 114,667.00 Payable to trustee 32,800.00
Notes Payable 91,733.00
Wages Payable 12,000.00
total 218,400.00
INCOME OR LOSS AND SUPPLEMENTARY ITEMS
Supplementary Expenses: Supplementary Loss:
Administrative Expense 32,800.00 Net Loss 286,400.00
1,521,600.00 1,521,600.00