Instructions: Show the order of priority of payment of debts for Master Ltd and calculate the amount payable to the company's trade accounts payable.
Instructions: Show the order of priority of payment of debts for Master Ltd and calculate the amount payable to the company's trade accounts payable.
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter18: Comparative Forms Of Doing Business
Section: Chapter Questions
Problem 19P
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Question
Transcribed Image Text:14. Master Ltd, whose capital consisted of $500,000 in fully paid shares, was wound
up as a result of court order s liquidator realised $891,950 from the sale of
the company's assets. This amount included $250,000 from the proceeds on
sale of the company's land and buildings. Debts proved and admitted were:
Unsecured notes
$150,000
Debentures (secured by circulating security
interest)
First mortgage on land and buildings
Trade accounts payable
PAYG tax instalment
Fringe benefits tax
350,000
200,000
78,000
860
3,000
3,989
3,000
GST
Employees' holiday pay
Employees' wages-
$400 per week
Secretary's salary-3 weeks at $550 per week
Managing director's salary-4 weeks at $900 per
week
5 empleyees for 2 weeks at
4,000
1650
3,600
4,000
Sales commission
Liquidation expenses
Second mortgage on land and buildings
Liquidator's remuneration
80,000
90,000
6,000
Instructions:
Show the order of priority of payment of debts for Master Ltd and calculate the amount payable
to the company's trade accounts payable.
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