ILLUSTRATIVE PROBLEM
TROUBLED CORPORATION
STATEMENT OF FINANCIAL POSITION
MARCH 1, 2017
Assets
Current assets:
Cash P4000
Accounts receivable P20,000
Less: ADA 2,000 18,000
Marketable securities 8,000
Inventories 40,000
Total current assets 70,000
Required:
1. Statement of affairs
2. Deficiency Statement
3. Expected recovery rate
4. Estimated amount to be realized by the different creditors
The statement of realization and liquidation was prepared for Hopeless Corp. for the three-month
period December 31,2017. The totals are as shown below
Required:
1. Cash balance as of January 1, 2017
2. Net income(loss) for the period
3. Cash balance as of June 30,2017