Advanced Accounting Review / Introduction / 1st Final Quiz

Started on Saturday, November 24, 2018, 9:02 AM

State Finished
Completed on Saturday, November 24, 2018, 10:00 AM
Time taken 58 mins 45 secs
Marks 21.00/22.00
Grade 95.45 out of 100.00
Question 1
Correct Mark 1.00 out of 1.00

The following data were taken from the statement of affairs of

 MARACLARA CORPORATION:
Assets pledged for fully secured liabilities (current fair value, P75,000)  
Assets pledged for partially secured liabilities (current fair value P52,000)        P 90,000
Free assets (current fair value , P40,000)  
Unsecured liabilities with priority           74,000
Fully secured liabilities 70,000

Partially secured liabilities           7,000

Unsecured liabilities without priority          30,000
         60,000
        112,000

The amount to be paid fully secured creditors is:

Select one or more:

a. P20,000
b. P30,000 
c. P35,000

d. P32,000

Your answer is correct.

The correct answer is: P30,000
Question 2
Correct Mark 1.00 out of 1.00

Kent Co. led a voluntary bankruptcy petition on August 15, 2019, and the
statement of affairs re ected the following amounts:

                                                                                                Book
Value                         Estimated Current Value
                                Assets
Assets pledged with fully secured creditors       P    300,000                         
                P        370,000

Assets pledged with partially secured creditors        

180,000                                                 120,000
Free assets                                                                              
420,000                                                     320,000
                                                                                                P
   900,000                                          P       810,000

                Liabilities
Liabilities with priority                                                                                                
                P          70,000

Fully secured
creditors                                                                                                                
         260,000
Partially secured
creditors                                                                                                           
        200,000
Unsecured
creditors                                                                                                                      
          540,000
                                                                                                                                               
              P     1,070,000
Assume that the assets are converted to cash  at the estimated current
values and the business is liquidated.  What amount of cash will be available
to pay unsecured non-priority claims?

Select one or more:

a.       320,000
b.       360,000 
c.     280,000

d.     240,000

Your answer is correct.

The correct answer is:       360,000

Question 3
Correct Mark 1.00 out of 1.00

BALAW-ANG Corp. was forced into bankruptcy and is in the process of

liquidating assets and paying claims.  Unsecured claims will be paid at the
rate of P0.40 on the peso. Hale holds a P30,000 non interest bearing note
receivable from BALAW-ANG collaterized by an asset with a book value of
P35,000 and a liquidation value of P5,000.

What amount to be realized by hale on this note is:

Select one or more:

a.          5,000
b.        15,000 
c.       12,000

d.       17,000

Your answer is correct.

The correct answer is:        15,000
Question 4
Correct Mark 1.00 out of 1.00

The Statement of Affairs for CANDY CORPORATION shows that

approximately P0.78 on the peso probably will be paid to unsecured
creditors without priority. The corporation owes TOY COMPANY P23,000 on
a promissory note, plus accrued interest of P940. Inventories with a current
fair value of P19,200 collateralize the note payable.  Compute the amount
that the TOY COMPANY would receive from CANDY CORPORATION
assuming that the actual payments to unsecured creditors without priority
consist of 78% of total claims. Round all amounts to the nearest peso.

Select one or more:

a. P19,200

b. P52,200
c. P22,897 
d. P33,987

Your answer is correct.

The correct answer is: P22,897

Question 5
Correct Mark 1.00 out of 1.00

CANYON ENTERPRISES led a voluntary bankruptcy petition on July 31,

2013 and its Statement of Affairs re ects the following amounts:
           Book Value Current Value
Assets:    
Pledged with Fully secured creditor    
P  520,000            P  410,000
Pledged with Partially secured creditor                      
292,500                   92,500
Free Assets 350,000              47,500
Totals P1,162,500 P  550,000
     
Liabilities:    
Unsecured with priority P    65,000  
Fully secured 402,250  
Partially secured 225,000  
Unsecured without priority 345,000  
Sub-total P1,037,250  
Stockholders’ Equity    
Capital stock                                                           147,500  
Retained Earnings, deficit                                    (   22,250)  
Totals P1,162,500              

The total estimated de ciency is allocable to the following creditors at the

respective amounts shown below: 
          Unsecured         Fully        Partially        Unsecured

         W/priority       Secured       Secured     w/out priority

 a.    P  0                P0         P132,500         P289,750
 b.    P 65,000         P0         P225,000         P345,000
 c.    P   9,750         P0         P132,500         P345,000

 d.    P  0           P110,000    P225,000         P289,750

Select one or more:

a. P   9,750         P0         P132,500         P345,000 
b. P  0           P110,000    P225,000         P289,750

c.   P  0                P0         P132,500         P289,750

d. P 65,000         P0         P225,000         P345,000

Your answer is correct.

The correct answer is: P   9,750         P0         P132,500         P345,000
Question 6
Correct Mark 1.00 out of 1.00

The statement of affairs of JEREMIAH CORPORATION. shows the following:

Estimated gains on realization of assets  
Estimated losses on realization of assets P 1,280,000
Additional assets  
Additional liabilities 2,244,000
Capital stock 1,000,000

Deficit 300,000
2,000,000
900,000

The pro-rata payment on the peso, to stockholders, is:

Select one or more:

a. P0.75

b. P0.43
c. P0.76 
d. P0.78

Your answer is correct.

The correct answer is: P0.76
Question 7
Incorrect Mark 0.00 out of 1.00

CANYON ENTERPRISES led a voluntary bankruptcy petition on July 31,

2013 and its Statement of Affairs re ects the following amounts:
           Book Value Current Value
Assets:    
Pledged with Fully secured creditor    
P  520,000            P  410,000
Pledged with Partially secured creditor                      
292,500                   92,500
Free Assets 350,000              47,500
Totals P1,162,500 P  550,000
     
Liabilities:    
Unsecured with priority P    65,000  
Fully secured 402,250  
Partially secured 225,000  
Unsecured without priority 345,000  
Sub-total P1,037,250  
Stockholders’ Equity    
Capital stock                                                           147,500  
Retained Earnings, deficit                                    (   22,250)  
Totals P1,162,500              

The estimated payment that will be made to partially secured creditors in

the event of liquidation at this point is:

Select one or more:

a.             P205,125

b. P112,625
c. P225,000 
 d. P  92,500

Your answer is incorrect.

The correct answer is: P112,625

Question 8
Correct Mark 1.00 out of 1.00

BROOKLYNNE ENTERPRISES. has been forced into bankruptcy and

liquidated. Unsecured claims will be paid at the rate of P0.70 on the peso.
KITKAT ENTERPRISES holds a non-interest bearing note receivable from
BROOKLYNNE in the amount of P60,000 collateralized by machinery with a
liquidation value of P10,000.  The total amount to be realized by KITKAT on
this note receivable is:

Select one or more:

a. P45,000 
b. P25,000

c. P30,000

d. P10,000

Your answer is correct.

The correct answer is: P45,000
Question 9
Correct Mark 1.00 out of 1.00

The following data were taken from the statement of affairs of

 MARACLARA CORPORATION:
Assets pledged for fully secured liabilities (current fair value, P75,000)  
Assets pledged for partially secured liabilities (current fair value P52,000)        P 90,000
Free assets (current fair value , P40,000)  
Unsecured liabilities with priority           74,000
Fully secured liabilities 70,000

Partially secured liabilities           7,000

Unsecured liabilities without priority          30,000
         60,000
        112,000

The amount that will be paid to creditors with priority is:

Select one or more:

a. P7,000             
b. P7,500   

c. P6,000

d. P6,200

Your answer is correct.

The correct answer is: P7,000            
Question 10
Correct Mark 1.00 out of 1.00

In 2019, Camel Corp. was forced into bankruptcy and begun to liquidate. 
The following selected account selected account balances were taken from
its statement of affairs:

                                                                                                     Book

Value                    Estimated Current Value
Assets pledged with partially secured creditors                       P  
80,000                                P     50,000
Total free assets                                                                       
220,000                                      160,000

 
                                                                                                      Book Value  
                 Amount Unsecured
Preferred claims                                                                   P   
16,000                                P                  0

Partially secured liabilities                                                    

75,000                                      25,000
Unsecured liabilities                                                              
155,000                                          155,000

What is the amount of de ciency to creditors?

Select one or more:

a.         36,000 
b.        180,000

c.        144,000
 d.       160,000

Your answer is correct.

The correct answer is:         36,000

Question 11
Correct Mark 1.00 out of 1.00

In May 2019, it was determined that it is necessary to complete the work in

process of Wild Corp. To complete the work in process, P10,000  book value
of raw materials and supplies and P10,000 conversion cost will be required.
When completed, these goods will probably sell for approximately P50,000.
The  raw materials, which have a book value of P40,000, have an estimated
total realizable value P20,000. What is the estimated  amount that will
become available for unsecured as a result of the realization of the work in
process?            

     

Select one or more:

a.  30,000
    

b.           0

c. 50,000
      
d.  35,000
   

Your answer is correct.

The correct answer is:  35,000
   
Question 12
Correct Mark 1.00 out of 1.00

The following selected account balances were taken from the balance sheet
of Quinting Corporation as of December 31, 2009, immediately before the
takeover of the trustee:

Marketable Security                                                   P300,000

Inventories                                                                        110,000
Land                                                                                      150,000

Building                                                                               400,000
Additional Information:
·         Marketable Securities have present market value of P320,000.  These
securities have been pledge to secure notes payable of P280,000.

·         The estimated worth of investments is P70,000. However, inventories

with book value of P50,000 have been pledged to secure notes payable of
P60,000. The realizable value of the inventories pledge is estimated to be
P40,000.
·         Land and Building are estimated to have a total realizable value of
P450,000. This property is pledge to secure the mortgage payable of
P250,000.

                                                                                        
 What is the estimated  amount available for preferred claims and unsecured
creditors out of assets  pledge with fully secured creditors.

Select one or more:

a.  770,000
b.  240,000 
c. 840,000

d.  810,000
Your answer is correct.
The correct answer is:  240,000
Question 13
Correct Mark 1.00 out of 1.00

The accountant of Drifting Corp. prepared a statement of affairs.  Assets

which there are no claims or liens are expected to produce P700,000.
Unsecured claims of all classes totaled to P1,050,000.  The following data
are deemed outstanding:

·         Accrued salaries

·         Unrecorded note for P10,000, on which P600 of interest has accrued
held by Normandy Co.
·         A note for P30,000 secured by P40,000 receivable, estimated to be
60% collectible held by Jones Co.

·         A P15,000 note on which P300 interest held accrued held by James
Pty. Property with a book value of P10,000 and market value of P18,000 is
pledged to guarantee payment of principal and interest.
·         Unpaid income taxes of P35,000
What is the amount realized  by partially secured creditors?

Select one or more:

a.       19,500

b.        24,900
c.       27,900 
d.        10,600

Your answer is correct.

The correct answer is:       27,900

Question 14
Correct Mark 1.00 out of 1.00

When LAGUNA COMPANY led for liquidation with the Securities and
Exchange Commission, it prepared the following balance sheet.

 
Current assets, net realizable value, P110,000  
P   80,000
Land and buildings, fair value, P180,000)  
200,000
Goodwill, fair value, P0        40,000
Total assets P 320,000
   
Accounts payable P 160,000
Mortgage payable, secured by land and building  
200,000
Common stock 100,000
Retained earnings, deficit ( 140,000)
Total equities P 320,000

 
How much would the holders of the mortgage payable likely to get?

Select one or more:

a. P360,667

b.   P  60,000                     

c.   241,000
d.  P192,222
           

Your answer is correct.

The correct answer is:  P192,222
           
Question 15
Correct Mark 1.00 out of 1.00

PRINCESS COMPANY led a voluntary bankruptcy petition on August 15,

2013 and the statement of affairs re ect the following amounts:
  BOOK CARRYING ESTIMATED CURRENT
  VALUE VALUE

     

  P  150,000  

Pledged with fully    secured creditors   P 185,000

90,000      210,000  
Pledged with partially        
 secured creditors P 450,000 60,000

Free Assets                    160,000

  Liabilities P 405,000

  P   35,000  
130,000
 
Liabilities with priority 100,000

Fully secured creditors    270,000

Partially secured creditors P 535,000

Unsecured creditors  

 
How much cash will be available to pay the unsecured non-priority claims?

Select one or more:

a. P240,000         

b. P160,000
c. P180,000 
d. P125,000

Your answer is correct.

The correct answer is: P180,000
Question 16
Correct Mark 1.00 out of 1.00

The following data were taken from the statement of affairs of

 MARACLARA CORPORATION:
Assets pledged for fully secured liabilities (current fair value, P75,000)  

Assets pledged for partially secured liabilities (current fair value P52,000)        P 90,000
Free assets (current fair value , P40,000)  
Unsecured liabilities with priority           74,000
Fully secured liabilities 70,000
Partially secured liabilities           7,000

Unsecured liabilities without priority          30,000

         60,000
        112,000

The amount to be paid to unsecured creditors:

Select one or more:

a. P72,800 
b. P72,000

c. P70,800

d. P78,200

Your answer is correct.

The correct answer is: P72,800

Question 17
Correct Mark 1.00 out of 1.00

In 2019, Camel Corp. was forced into bankruptcy and begun to liquidate. 
The following selected account selected account balances were taken from
its statement of affairs:

                                                                                                     Book

Value                    Estimated Current Value
Assets pledged with partially secured creditors                       P  
80,000                                P     50,000
Total free assets                                                                       
220,000                                      160,000

 
                                                                                                      Book Value  
                 Amount Unsecured
Preferred claims                                                                   P   
16,000                                P                  0

Partially secured liabilities                                                    

75,000                                      25,000
Unsecured liabilities                                                              
155,000                                          155,000

What is the estimated amount of liquidating dividend per peso claim (

rounded to the nearest centavo)?

Select one or more:

a.       1.17
b.        0.80 
c.       0.88

d.        1.03
Your answer is correct.

The correct answer is:        0.80

Question 18
Correct Mark 1.00 out of 1.00

When LAGUNA COMPANY led for liquidation with the Securities and
Exchange Commission, it prepared the following balance sheet.

 
Current assets, net realizable value, P110,000  
P   80,000
Land and buildings, fair value, P180,000)  
200,000
Goodwill, fair value, P0        40,000
Total assets P 320,000
   
Accounts payable P 160,000
Mortgage payable, secured by land and building  
200,000
Common stock 100,000
Retained earnings, deficit ( 140,000)
Total equities P 320,000

What is the estimated de ciency to unsecured amounts?

Select one or more:

a. P  90,000

b. c. P192,000
c. P  70,000 
d. d. P140,000

Your answer is correct.

The correct answer is: P  70,000
Question 19
Correct Mark 1.00 out of 1.00

Scott Company led a voluntary bankruptcy petition on June 25, 2019, and
the statement of affairs re ects the following amounts:

                                                                                  Book Carrying

Amount                                Estimated Current Value
                                Assets
Assets pledged with fully secured creditors       P    160,000                         
         P     190,000

Assets pledged with partially secured

                Creditors                                                                  
90,000                                            60,000
Free Assets                                                                       
   200,000                                               140,000

                                                                                           P    

450,000                                       P      390,000
 

                        Liabilities
Liabilities with priority                                                                                                
        P   20,000
Fully secured creditors                                                                                                
           130,000

Partially secured creditors                                                                                         

           100,000
Unsecured
creditors                                                                                                                 
260,000
                                                                                                                                               
      P   510,000
Assume that the assets are converted into cash at the estimated current
values and the business is liquidated.  What total amount of cash should
partially secured creditors received?

Select one or more:

a.       100,000

b.          60,000
c.         84,000 
d.          90,000

Your answer is correct.

The correct answer is:         84,000

Question 20
Correct Mark 1.00 out of 1.00

The following data were taken from the statement of affairs of

 MARACLARA CORPORATION:
Assets pledged for fully secured liabilities (current fair value, P75,000)  
Assets pledged for partially secured liabilities (current fair value P52,000)        P 90,000
Free assets (current fair value , P40,000)  
Unsecured liabilities with priority           74,000
Fully secured liabilities 70,000

Partially secured liabilities           7,000

Unsecured liabilities without priority          30,000
         60,000
        112,000

The amount to be paid to partially secured creditors is:

Select one or more:

a. P56,200

b. P 57,000
c. P57,200 
d. P52,700

Your answer is correct.

The correct answer is: P57,200
Question 21
Correct Mark 1.00 out of 1.00

In 2019, Camel Corp. was forced into bankruptcy and begun to liquidate. 
The following selected account selected account balances were taken from
its statement of affairs:

                                                                                                     Book

Value                    Estimated Current Value
Assets pledged with partially secured creditors       P   80,000                     
          P   50,000
Total free assets                                                                       
220,000                                      160,000

 
                                                                                                      Book Value  
                 Amount Unsecured
Preferred claims                                                                   P   
16,000                                P                0

Partially secured liabilities                                                    

75,000                                      25,000
Unsecured liabilities                                                               155,000                       
             155,000

What is the total amount available payment of claims of unsecured

creditors?

Select one or more:

a.        160,000
b.       144,000 
 c.               0

d.     210,000

Your answer is correct.

The correct answer is:       144,000
Question 22
Correct Mark 1.00 out of 1.00

The following selected account balances were taken from the balance sheet
of Quinting Corporation as of December 31, 2009, immediately before the
takeover of the trustee:

Marketable Security                                                       P300,000

Inventories                                                                        110,000
Land                                                                                      150,000

Building                                                                               400,000
Additional Information:
·         Marketable Securities have present market value of P320,000.  These
securities have been pledge to secure notes payable of P280,000.

·         The estimated worth of investments is P70,000. However, inventories

with book value of P50,000 have been pledged to secure notes payable of
P60,000. The realizable value of the inventories pledge is estimated to be
P40,000.
·         Land and Building are estimated to have a total realizable value of
P450,000. This property is pledge to secure the mortgage payable of
P250,000.

What is the total amount of net free assets.

Select one or more:

a. 810,000

b.      240,000
 c.  770,000
d.     270,000 

Your answer is correct.

The correct answer is:     270,000

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