Scribd
Upload
296 views1 page

Performance Task 2

The balance sheet shows Kimerald Corporation's financial position on March 1, 20x6 when an interim trustee took control due to SEC intervention. The trustee's activities during March included collecting receivables and selling inventories and property to generate cash, while incurring administrative expenses. The requirement asks to: 1) set up separate accounting records for the trustee, 2) prepare financial statements on March 31 showing the conversion of assets to cash, and 3) record journal entries to distribute cash to creditors and close the books.

Uploaded by

wivada
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
296 views1 page

Performance Task 2

The balance sheet shows Kimerald Corporation's financial position on March 1, 20x6 when an interim trustee took control due to SEC intervention. The trustee's activities during March included collecting receivables and selling inventories and property to generate cash, while incurring administrative expenses. The requirement asks to: 1) set up separate accounting records for the trustee, 2) prepare financial statements on March 31 showing the conversion of assets to cash, and 3) record journal entries to distribute cash to creditors and close the books.

Uploaded by

wivada
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 1

Performance Task 2

The balance sheet of Kimerald Corporation appeared as follows on March 1, 20x6, when an interim
trustee was appointed by the Securities and Exchange Commission (SEC) to assume control of
Kimerald’s estate.

Assets
Cash P 8,000
Accounts receivable – net 16,000
Inventories 72,000
Land 40,000
Building – net 200,000
Intangible assets 52,000
Total assets P 388,000

Liabilities and Stockholders’ Equity


Accounts payable P 100,000
Note payable – unsecured 80,000
Deferred revenue 2,000
Wages payable 6,000
Mortgage payable 160,000
Capital Stock 80,000
Retained earnings (deficit) (40,000)
Total liabilities and equity P 388,000

Additional information:
1. The land and buildings are pledged as security for the mortgage payable.
2. In January 20x6, Kimerald received P2,000 from a customer as a payment in advance for
merchandise that is no longer marketed.
3. Activities of the trustee during March are summarized as follows:
a. P15,200 is collected on the receivables.
b. Inventories are sold for P38,800.
c. Land and building bring a total of P180,000.
d. Nothing is realized from the intangible assets.
e. Administrative expenses of P16,400 are incurred by the trustee.

Requirement:
1. Prepare a separate set of books for the trustee to assume possession of the estate and convert its
assets into cash.
2. Prepare financial statements on March 31 for Kimerald in trusteeship (Statement of Financial
Position, cash receipts and disbursements, and statement of estate deficit).
3. Prepare journal entries on the trustee’s books to distribute available cash to creditors and close the
books.
Note: Please write legibly your answer in good form on a clear piece of papers. Then take a picture of
them and submit it to our google classroom by attaching the file. Do not forget to click hand in or turn
in. Submit on or before the due time. Thank you and God bless.

You might also like