AC11- Chaapter 7.pptx

7/25/2019 AC11- Chaapter 7.pptx

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CHAPTER 7

Statement of

Realization andLiquidation


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The following balance sheet is prepared for theWalana Co. on December 1 when C. !on"ales is

appointed tr#stee to ta$e o%er control&

E'ercise 7(1

ASSETS LIABILITIES

Cash P )**** Acco#ntsPa+able

P,7-***

Recei%ables 1**** /hare Capital,-****

0erchandise ,***** RetainedEarnings

1****2

3#rnit#res and 3i't#res

net2

7-***

Total P -1-***

Total P-1-***


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Transactions in December are s#mmari"ed asfollows&

Cash Receipts:

/ales of0erchandise

P 1,****

Collection ofrecei%ables

Compan+recei%ables

P4,-**

Tr#steeshipclaims

,,-* 457-*

P ,157-*

CashDisbursements:

P#rchase ofmerchandise

P 67-*

E'penses P 7***

P 1*7-*


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/ales of merchandise on acco#nt in Decembertotaled P4***. Compan+ recei%ables of P6,-*

were written o as worthless. At the end ofDecember the merchandise on hand is %al#ed atP11,-**. Depreciation of f#rnit#re and 8't#resis P1,-*.


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9nstr#ctions&

1. Prepare a statement of reali"ation andli:#idation in con%entional form together withs#pporting sched#les.


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At the end of December assets remaining to be reali"ed; liabilities to be li:#idated are as follows&

Assets

Recei%ables&


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0erchandise&

=At the end of December the merchandise on

hand is %al#ed at P11,-**

3#rnit#re ; 3i't#res&

al#e P7-***

Depreciation 1,-*2

3;3 Dec. 61 P 767-*


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12

12

12

alana Co! Debtor

C! "onzales# Trustee

Statement of Realization $ Liquidation

%or the month ended December &'# ()

Assets

Assets to be reali"ed& Assets Reali"ed&

3#rnit#re ; 3i't#re P 7-***Recei%ables 1**** ,2 Recei%ables old P 4

0erchandise ,** *** ,2 Recei%ables new ,

Assets Ac:#ired& Assets not reali"ed&

62 Recei%ables new 4 *** Recei%ables old 5

Recei%ables new )7-*

0erchandise 11,-**

3#rnit#re ; 3i't#res 76 7-*


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*+TES

Asset Section

Page 6, no.1 b. Remaining assets are listed as debitsin the asset section of the statement #nder the heading?assets to be reali"ed.@

Page 6, no., a. /ales on Acco#nt are reported to

Acco#nts recei%able in the assets section #nder theheading ?Assets ac:#ired@ and a credit to sales in there%en#e ; e'pense section #nder the heading?s#pplementar+ credits@

Page 6, no.6 a. Cash receipts are reported as debits inthe cash sched#le and as credits either in the assetsection #nder the heading ?assets reali"ed@ or in there%en#e and e'pense section #nder the heading?/#pplementar+ credits@ whiche%er is appropriate.


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Liabilities

iabilities not li:#idated& iabilities to be li:#idated&

Acco#nts Pa+able P,7-*** Acco#nts pa+able P ,7-***

Re,enues $ E-penses

/#pplementar+ Charges& /#pplementar+ Credits&

52 P#rchases 67-* 12 /ales on acco#nt 4***

-2 E'penses 7*** 62 /ales for cash 1,* ***P 7547-*

Bet !ain (.#(/)

Total 0 11.# ))) Total 0 11.#)))


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Liabilities Section

Page 6, no.1 c. iabilities are listed as credits in the

liabilit+ section of the statement #nder the heading?iabilities not li:#idated.@

Page 6, no.5 b. iabilities still to be li:#idated arelisted #nder the liabilit+ section heading ?liabilities notli:#idated.

Re,enues and E-pense Section

Page 6, no., b. P#rchases on acco#nt are reportedas a debit to p#rchases in the re%en#e and e'pense

section #nder the heading ?/#pplementar+ charges.@ Page 6, no., a. /ales on acco#nt are reported as

credit to sales in the re%en#es and e'pense section#nder the heading ?s#pplementar+ credits@.


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Page 6, no.6 a. Cash receipts are reported as creditin the re%en#e and e'pense section #nder theheading ?s#pplementar+ credits.@


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alana Co! Debtor

C! "onzales# Trustee

Supplementar2 Schedules to Accompan2 Statement of

Realization and Liquidation%or the month ended December &'# ()

Cash

Dec. 1 12


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/hare Capital

Dec. 1


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Page 6, no.1 a. The cash balance is

reported as a debit in the cash sched#le.

Page 6, no.6 a. Cash receipts are reported

as debits in the cash sched#le

Page 6, no.1 a. Capital balances arereported as credits in appropriatel+ titled

capital sched#les.


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The gain of P ,),-* emerges from these categories asfollows Loss or

3"ain4

Assets&

Assets to bereali"ed P5--***

Proceeds fromasset reali"ation P457-*

Assets ac:#ired 4***

Assets notreali"ed ,77,-*

P5)5*** P67,*** 4,***

iabilities&

iabilities notli:#idated

P,7-*** iabilities to beli:#idated

P ,7-*** *

Re%en#es;E'penses&

/#pplementar+Charges

P1*7-* /#pplementar+credit

P1,4*** 11,-*2

30(.#(/

)4


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Assets iabilities

Cash 0(.5#))) Liabilities not liquidated

0(1/#))) Assets not Realized (11#(/) Capital Stoc6(/)#)))

Retained Earnin7s '.#(/)

Total Assets 0/5'#(/) Total Liabilities and Stoc6holders Equit2 0/5'#(/)

Walana Co. Debtor


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E8ERCISE 19( RE0+RTI*" +% ITES I*T;E STATEE*T +% REALIIDATI+*


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!. TRADE 3 DE9>ER TRGCF W9TH A AGE 3P)*** 3R A BEW TRGCF C/T9B! P11***I P-*** 9/AWED B THE TRADE(9B ABD THE


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A. ACCGBT/ RECE9>A


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!. TRGCF M ?A//ETD ACLG9RED@ 11***CA/H M ?CA/H /CHEDGE@ )***

TRGCF M ?A//ET/ REA9KED@ -***

Page 6, B#mber , etter A.

H. ACCGBT/ PAA


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EJERC9/E 7(6

D9ABKB !AD/ T.


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A


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3#ll+ /ec#red

Partiall+ /ec#red Gnsec#red

With Priorit+ Witho#t Priorit+

Classi8cation of iabilities

R i bl ll t d t t


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Recei%ables collected amo#nt toP64***. Recei%ables with a

boo$ %al#e of P1-*** that werenot allowed for were written o.

A//ET/ 9A


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A//ET/

9A


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A//ET/ 9A


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A//ET/9A


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A//ET/ 9A


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A//ET/ 9A


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A//ET/ 9A


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A//ET/ 9A


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A//ET/ 9A


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E:#it+

/ec#red Gnsec#red

Cash Boncash3#ll

/ec#redPartiall+/ec#red

WithPriorit+

WOPriorit+

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AC11- Chaapter 7.pptx