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The equipment loan payable is secured by specific plant assets having a book
value of P300,000 and a realizable value of P350,000. Of the accounts payable,
P40,000 is secured by inventory which has a cost of P40,000 and a liquidation
value of P44,000. The balance of the inventory has a realizable value of P32,000.
Receivables with a book value and market value of P100,000 and P80,000
respectively have been pledged as collateral on the business loan payable. The
balance of the receivables have a realizable value of P150,000.
(Adapted)

21. Assuming trustee expenses of 12,000 in addition to recorded liabilities, which

of the remaining unsecured creditors has the next highest order of priority.

a. Accrued payroll c. Loan from officer

b. Equipment loan payable d. Business loan payable

22. The realizable value of assets pledged with fully secured creditors is:

a. P459,000 c. P40,000
b. 44,000 d. 489,000

23. Of those creditors who are partially secured, their unsecured amounts are:

a. P430,000 c. P540,000
b. 110,000 d. 120,000

24. The total realizable value of free assets to unsecured creditors before
unsecured creditors with priority is:

a. P628,000 c. P220,000
b. 232,000 d. 198,000

25. The dividend to unsecured creditors or the expected recovery percentage

of unsecured creditors (rounded) is:

a. 90%. c. 88%
b. 100%. d. 76%

26. Estimated deficiency to unsecured creditors is:

a. P —0– c. P 2,000
b. 22,000 d. 12,000
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27. Estimated loss on asset disposition is:

a. P51,000 c. P 51,000
b. 89,000 d. 90,000

28. Estimated gain as asset disposition is:

a. P56,000 c. P 52,000
b. 54,000 d. 6,000

29. Estimated amount paid to unsecured creditors with priority is:

a. P10,000 c. P 40,000
b. 30,000 d. 110,000

30. Estimated amount paid to fully secured creditors is:

a. P40,000 c. P470,000
b. 390,000 d. 430,000

31. Estimated amount paid to unsecured creditors without priority is:

a. P70,000 c. P 20,000
b. 61,600 d. 50,000

32. Estimated payment to partially secured creditors is:

a. P358,800 c. P168,000
b. 516,800 d. 430,000

33. Estimated payment to creditors is (discrepancy is expected due to rounding

off).

a. P580,000 c. P571,000
b. 659,600 d. 668,400
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MULTIPLE CHOICE ANSWERS

1. c 11. c 21. a 31. d

2. c 12. c 22. d
3. b 13. d 23. c
4. d 14. d 24. d
5. c 15. a 25. d
6. c 16. d 26. a
7. c 17. c 27. c
8. d 18. d 28. a
9. d 19. c 29. b
10. b 20. c 30. B

MULTIPLE CHOICE ANSWERS

EXPLAINED