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Cla 10

The document provides information about the account balances of a company going through bankruptcy that include cash, receivables, inventory, land, buildings, payables, notes payable, bonds payable, common stock, and retained earnings. It then asks questions to calculate the amounts paid to notes payable, accounts payable, salaries payable, and bonds payable based on the asset values and security interests. The questions also address true/false statements about owners' equity in a statement of affairs, the purpose of a statement of affairs, classification of liabilities, types of insolvency and creditors, and stockholder approval in bankruptcy reorganization.

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Von Andrei Medina
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471 views

Cla 10

The document provides information about the account balances of a company going through bankruptcy that include cash, receivables, inventory, land, buildings, payables, notes payable, bonds payable, common stock, and retained earnings. It then asks questions to calculate the amounts paid to notes payable, accounts payable, salaries payable, and bonds payable based on the asset values and security interests. The questions also address true/false statements about owners' equity in a statement of affairs, the purpose of a statement of affairs, classification of liabilities, types of insolvency and creditors, and stockholder approval in bankruptcy reorganization.

Uploaded by

Von Andrei Medina
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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ENABLING ASSESSMENT

1. A company going through a bankruptcy has the following account balances:

Cash 30,000

Receivable (30% collectible) 50,000

Inventory (worth P39,000) 90,000

Land (worth P120,000, secures note payable) 100,000

Buildings (worth P180,000, secures bond payable) 200,000

Salaries payable 10,000

Account payable 90,000

Notes payable (secured by land) 110,000

Bonds payable (secured by building) 300,000

Common stock 100,000

Retained earnings 140,000

● The amount paid to Note Payable is ___.


110000

● The amount paid to Accounts Payable is ___.


36000

● The amount paid to Salaries Payable is ___.


10000

● The amount paid to Bonds Payable is ___.


228000

2. Owners’ equity amounts are not displayed in a statement of affairs.


True

3. A statement of affairs is the initial report prepared at the start of the liquidation process.
True

4. In the accountability technique of accounting used by a trustee for a debtor in bankruptcy liquidation,
there is no ledger account for owner’s equity.
True

5. Liabilities in the statement of affairs are classified into short-term and long-term liabilities.
False
6. Voluntary insolvency occurs when three or more creditors of the insolvent corporation file a petition to a
court of law for the adjudication of the corporation as insolvent.
False

7. Creditors having priority under the Bankruptcy Law include creditors having security interests
collateralized by specific assets of the debtor.
False

8. A debtor in bankruptcy liquidation will not be discharged within six years of a previous bankruptcy
discharge.
True

9. Unsecured creditors whose claims are to be paid in full from the assets of a debtor in bankruptcy
liquidation before any cash is paid to other unsecured creditors are classified as unsecured creditors
having preference.
False

10. All stockholders of a corporation undergoing bankruptcy reorganization must approve the plan or
reorganization before it is confirmed by the bankruptcy court.
False

11. Assets in a statement of affairs are assigned to one of three categories:assets pledged for fully secured
liabilities, assets pledged for partially secured liabilities, and priority assets.
False

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