Scribd
Upload
130 views1 page

Formative Assessment: Statement of Realization and Liquidation

The document provides information about bankruptcy liquidation processes. It defines key terms like statement of realization and liquidation, which is used by a trustee to report on fiduciary activities. Creditors with security interests in specific assets may obtain satisfaction from unsecured assets. An accounting statement of affairs estimates amounts available to classes of claims. Examples are provided of companies undergoing liquidation, including their statements of realization and liquidation. The amounts realized by secured creditors on collateralized assets in bankruptcy proceedings are calculated.

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
130 views1 page

Formative Assessment: Statement of Realization and Liquidation

The document provides information about bankruptcy liquidation processes. It defines key terms like statement of realization and liquidation, which is used by a trustee to report on fiduciary activities. Creditors with security interests in specific assets may obtain satisfaction from unsecured assets. An accounting statement of affairs estimates amounts available to classes of claims. Examples are provided of companies undergoing liquidation, including their statements of realization and liquidation. The amounts realized by secured creditors on collateralized assets in bankruptcy proceedings are calculated.

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
You are on page 1/ 1

FORMATIVE ASSESSMENT

1. The document used by a trustee to report periodically on the status of fiduciary activities is called a/an
Statement of Realization and Liquidation

2. Statement 1: Creditors having security interests collateralized by specific assets of a debtor in


bankruptcy liquidation are entitled to obtain satisfaction of their claims from the free assets of the
debtor’s estate.
Statement 2: Creditors having security interest collateralized by specific assets of a debtor in
bankruptcy liquidation always have a 100% recovery rate.
Both statements are false.

3. The document used to estimate amounts available to each class of claims is called a/an
Accounting Statement Affairs

4. Goodbye Na Corp. has been undergoing liquidation since January 1. As of March 31, its condensed
statement of realization and liquidation is presented below:

5. On June 1, 2020, the books of Dreamer Corp. show assets with book values and realizable values as
follows:

6. On June 1, 2020, the books of Dreamer Corp. show assets with book values and realizable values as
follows:

7. Target Corp. was forced into bankruptcy and is in the process of liquidating assets and paying claims.
Unsecured claims will be paid at the rate of thirty cents on the peso. Arrow holds a note receivable from
Target for P90,000 collateralized by an asset with a book value of P60,000 and a liquidation value of
P30,000. The amount to be realized by Arrow on this note is
P48,000

8. Sparkman Co. filed a bankruptcy petition and liquidated its noncash assets. Sparkman was paying forty
cents on the peso for unsecured claims. Bailey Co. held a mortgage of P150,000 on the land that was
sold for P110,000. The total amount of payment that Bailey should have received is calculated to be
P126,000

You might also like