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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9A
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E:#it+
/ec#red Gnsec#red
Cash Boncash3#ll
/ec#redPartiall+/ec#red
WithPriorit+
WOPriorit+