Question
  1. Plano Ltd, whose capital consisted of $50000 in fully paid shares, was wound up as a result of a court order. Its liquidator realised $1,343,300 from the sale of the company’s assets. This amount included $340,000 from the proceeds on sale of the company’s land and buildings. Debts proved and admitted were:

 

Unsecured Notes

200000

Debentures (secured by circulating security interest)

600000

First mortgage on land and buildings

200000

Trade accounts payable

160000

PAYG tax instalment

1560

Fringe benefits tax

4000

Directors’ fees

6000

GST

3978

Employees’ holiday pay

10000

Employees’ wages —

8000

Secretary’s salary —

1440

Managing director’s salary —

4800

Sales commission

1000

Liquidation expenses

6000

Second mortgage on land and buildings

160000

Liquidator’s remuneration

16000

 

Required

Show the order of priority of payment of debts for Plano Ltd and calculate the amount payable to the company’s trade accounts payable

  1. Plano Ltd, whose capital consisted of $50000 in fully paid shares, was wound up as a result of a court order. Its liquidator realised $1,343,300 from the sale of the company’s assets. This amount included $340,000 from the proceeds on sale of the company’s land and buildings. Debts proved and admitted were:

 

Unsecured Notes

200000

Debentures (secured by circulating security interest)

600000

First mortgage on land and buildings

200000

Trade accounts payable

160000

PAYG tax instalment

1560

Fringe benefits tax

4000

Directors’ fees

6000

GST

3978

Employees’ holiday pay

10000

Employees’ wages —

8000

Secretary’s salary —

1440

Managing director’s salary —

4800

Sales commission

1000

Liquidation expenses

6000

Second mortgage on land and buildings

160000

Liquidator’s remuneration

16000

 

Required

Show the order of priority of payment of debts for Plano Ltd and calculate the amount payable to the company’s trade accounts payable

Expert Answer

1 Rating

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Other

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: a) Show the effects of these transactions on the accounting equation b) Prepare a balance sheet at J...

A: “Hey, since there are multiple questions posted, we will answer first question. If you want any spec...

Q: Following are selected account balances from Penske Company and Stanza Corporation as of December 31...

A: Given information is: On January 1, 2018, Penske acquired all of Stanza’s outstanding stock for $680...

Q: Bradford Watch Company manufactures luxury and sports watches both for male and female customers. Th...

A: Activity-based costing a method of assigning overheads based on usage of a particular activity. Trad...

Q: 8. Rough Riders Inc. manufactures jeans in the cutting and sewing process. Jeans are manufactured in...

A: a. Value-added time = Cutting time + Sewing time                                   = 6 + 15 = 21 Min...

Q: A married couple are calculating their federal income tax using the tax rate tables: If Taxpayer...

A: Given taxable income = $112,000 It falls in the bracket of $67,900 to $137,050 as per given tax slab...

Q: Amrinder, Mahinder and Joginder are partners in a firm. Mahinder retires from the firm. On his date ...

A: Prepare Mahinder’s Loan Account in the following cases: 1.  

Q: Morningside Technologies Inc. uses flexible budgets that are based on the followWing daa 8% of sales...

A: The selling and administrative expenses are the sum total of all the variable and fixed selling expe...

Q: The worksheet of the MAHA Company as follows. MAHA COMPANY Worksheet (partial) for the year ended D...

A: Journalize the closing entries at December 31,2018 as follows:

Q: a) What factors should be considered in determining the issue price of a debenture. b) On 1 July 201...

A: Debentures are debt instruments  issued  by a corporation with a fixed coupon rate to finance its re...

Q: buestion 0 The folowing information was disdosed during the audit of Kingbird Inc. Amount Due per Ta...

A: a) Calculate the taxable income (income before income taxes) for the year 2021 as follows: The taxa...

Q: Sarah has learned a lot from you over the past two months, and has compiled the following data for S...

A: Budget Performance Report means comparing the planned budget with the actual performance.

Q: On July 1, 2016, Killearn Company acquired 80,000 of the outstanding shares of Shaun Company for $12...

A:   Formulas for the above table:    

Q: Information technology has made it easier for managers to perform all of the following tasks except ...

A: Budgetary slack refers to conscious estimation of budgeted revenue by under valuation or over valuat...

Q: Decision to Discontinue a Product

A: A)   Differential analysis Cont. (Alt.1) or discontinue (Alt 2) Children's shoes Novembe...

Q: Using variable and absorption costing, making decisions The 2018 data that follow pertain to Eli’s E...

A: Click to see the answer

Q: Valencia Manufacturing Company manufactures and sells musical gadgets. The business earned Operating...

A: The profit calculated by deducting the operating expenses from the gross profit in a business is sai...

Q: Problems 19 through 21 should be viewed as independent situations. They are based on the following d...

A: Click to see the answer

Q: The following is the description of cash disbursements system of Two Symbols Limited:Upon receipt of...

A: Internal control: Internal control is a process which ensures continuous reliability of accomplishme...

Q: he financial year for Drip Dry Cleaning Services ends on 30 June. Using the following information,ma...

A: The Adjusting entries need to be passed at the end of the financial year so that the books are adjus...

Q: Paul and Donna Kelsch are planning a Mediterranean cruise in 5 years and will need $9,500 for the tr...

A: Calculations: Future value of Annuity. Formula = P{ ( 1+r) N - 1 / R } P = quarterly payments. R = I...

Q: What is the purpose of using the high-low method?

A: High-low method: In the high-low method, the semi variable-cost approximation is calculated by using...

Q: What are the feature of Receipt and Payment Account?

A: Receipt and Payment Account is a summary of cash Receipts and payments in an accounting period. Not ...

Q: The trial balance columns of the worksheet for MOON TRAVEL AGENCY are as follows. MOON TRAVEL AGENC...

A: Trial balance is a statement that shows balance of all the accounts (expense , revenue , capital , a...

Q: The budgeted balance sheet is part of which element of the master budget? a. Financial budget b. Ope...

A: Budgeted Balance Sheet: Management uses to predict the assets , liabilities and Stock holders equity...

Q: The current risk-free rate of return in the economy is 6%, in addition, the market rate of return is...

A: Expected rate of return is the profit to achieved by investing in a particular stock or bonds. CAPM ...

Q: What is the relevant range?

A: A relevant range is a range between minimum and the maximum amount under within which a revenue or c...

Q: Elijah James is in his early 30s and is thinking about opening an IRA. He can't decide whether to op...

A: An IRA is a short form of an Individual Retirement Account. It is a contribution scheme which allows...

Q: Accounting Question

A: Cash Budget A cash budget is a budget prepared by the company which shows the net cash of the compan...

Q: I started this question, but I got stuck. Can someone help me?

A:   October November December Total Sales $110,000 $138,000 $201,000 Cash sales (25%) $27,500 $34,...

Q: Preparing a financial budget—budgeted income statement and balance sheet Ball Company has the follow...

A: The budgeted income statement for the quarter ended March 31, 2019, is as follows: The gross profit ...

Q: Jim Fallon was recently promoted to senior accountant. He was put in charge of the Fresh Eats audit ...

A: Auditing means the inspection of financial accounts of the company to determine if the records are a...

Q: Using sensitivity analysis Mi Tierra Driving School charges $680 per student to prepare and administ...

A: Introduction Following formulas are used for calculation of contribution and break even point. Cont...

Q: Each autumn, as a hobby, Anne Magnuson weaves cotton place mats to sell through 3 local craft shop. ...

A: Click to see the answer

Q: During 2003, Wright Corp. had outstanding 125,000 shares of common stock and 7,500 shares of noncumu...

A: Calculate the basic earnings per share: Basic earnings per share is calculated by dividing the net i...

Q: 1) State whether each of the following items should be classified as taxes, licences and permits, in...

A: Click to see the answer

Q: What is a potential disadvantage of the reciprocal method? a. It is the most complex method of cost ...

A: Reciprocal method: It is the method in which the allocation of costs spent on other departments by t...

Q: Donovan Company incurred the following costs while producing 500 units: direct materials, $10 per un...

A: 1. Variable cost of goods sold = Direct materials + direct labor + variable manufacturing overhead =...

Q: Following is the unadjusted trial balance for Sun Energy Co. on December 31, 2017. Sun Energy Co. Un...

A:  Income statement is a statement prepared to calculate the net income of a company after deducting e...

Q: On February 1, Piscina Corporation completed a combination with Swimwear Company. At that date, Swim...

A: A ) Consolidated values under Pooling method and purchase method:   In purchase method value = $ 45...

Q: If a company increases its fixed costs for Product B, then the contribution margin per unit will a. ...

A: Option c is the answer.  

Q: Calculating breakeven point for two products Scotty’s Scooters plans to sell a standard scooter for ...

A: Click to see the answer

Q: Using variable costing, service company Henry’s Helpers provides locksmith services. One type of ser...

A: Compute the amount of contribution margin.

Q: 1) State whether each of the following items should be classified as taxes, licences and permits, in...

A: Sales and use taxes levied by the government should be classified as taxes. Payments by citizens for...

Q: Panama Company acquired 60% of Samoa Corporation on 1/2018. Fair values of Samoa's assets and liabil...

A: Hey, since there are multiple sub-parts posted, we will answer the three sub-parts. If you want any ...

Q: BOR CPAs, Inc. is a closely held corporation owned by three stockholders who used the initials of th...

A: Payroll expense is the amount of salaries and wages paid to employees in exchange for services rende...

Q: What is target profit?

A: The profits are the difference between the total revenues and the total cost. The business expects t...

Q: An increase in variable costs [A] increases p/v ratio [B] increases the profit [C] reduces contribu...

A: Contribution Margin = Sales – Variable costs P/V ratio = Contribution/Sales Margin of Safety in doll...

Q: On January 1, 2020, the JOSEPH Company budget committee has reached agreement on materials budgets b...

A: a)   JOSEPH COMPANY Production Budget For the six months ending June 30 ,2020 Partic...

Q: MCC Company produces one product, Motorbikes. Because of wide fluctuations in the demand for Motorbi...

A:  Flexible budget, also called a variable budget, is financial plan of estimated revenues and expense...

Q: “ Not – for –profit organisation” do not maintain any capital account”. What do they maintain instea...

A: Organisation that are set up for welfare of society , charitable institutions , schools and Trade un...