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Question
MetroTrade Corp. has the following obligations: (1) to suppliers, 3,000,000 due in 9 days; (2) to a landlord, 800,000 due in 15 days; (3) to a government agency, 250,000 due in 20 days; (4) to a bank, 2,000,000 due in 60 days. Its assets consist of cash on hand, 900,000; accounts receivable due in 12 days, 1,000,000; inventory, 3,000,000. Using the definition of insolvent under RA 10142, is MetroTrade Corp. insolvent? (a) State the definition of insolvent. (b) Apply the definition to these facts and determine whether MetroTrade Corp. is insolvent. (c) Can a debtor be insolvent even if it has positive net worth? Explain briefly.