Oakland Ltd, whose capital consisted of $50000 in fully paid shares, was wound up as a result of a court order. Its liquidator realised $3,358,250 from the sale of the company’s assets. This amount included $850,000 from the proceeds on sale of the company’s land and buildings. Debts proved and admitted were: Unsecured Notes 700000 Debentures (secured by circulating security interest) 1500000 First mortgage on land and buildings 500000 Trade accounts payable 400000 PAYG tax instalment 3900 Fringe benefits tax 10000 Directors’ fees 15000 GST 9945 Employees’ holiday pay 25000 Employees’ wages — 20000 Secretary’s salary — 3600 Managing director’s salary — 12000 Sales commission 2500 Liquidation expenses 15000 Second mortgage on land and buildings 400000 Liquidator’s remuneration 40000 Required Show the order of priority of payment of debts for Oakland Ltd and calculate the amount payable to the company’s trade accounts payable.
Oakland Ltd, whose capital consisted of $50000 in fully paid shares, was wound up as a result of a court order. Its liquidator realised $3,358,250 from the sale of the company’s assets. This amount included $850,000 from the proceeds on sale of the company’s land and buildings. Debts proved and admitted were: Unsecured Notes 700000 Debentures (secured by circulating security interest) 1500000 First mortgage on land and buildings 500000 Trade accounts payable 400000 PAYG tax instalment 3900 Fringe benefits tax 10000 Directors’ fees 15000 GST 9945 Employees’ holiday pay 25000 Employees’ wages — 20000 Secretary’s salary — 3600 Managing director’s salary — 12000 Sales commission 2500 Liquidation expenses 15000 Second mortgage on land and buildings 400000 Liquidator’s remuneration 40000 Required Show the order of priority of payment of debts for Oakland Ltd and calculate the amount payable to the company’s trade accounts payable.
Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations
Section: Chapter Questions
Problem 38P
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Oakland Ltd, whose capital consisted of $50000 in fully paid shares, was wound up as a result of a court order. Its liquidator realised $3,358,250 from the sale of the company’s assets. This amount included $850,000 from the proceeds on sale of the company’s land and buildings. Debts proved and admitted were:
Unsecured Notes |
700000 |
Debentures (secured by circulating security interest) |
1500000 |
First mortgage on land and buildings |
500000 |
Trade accounts payable |
400000 |
PAYG tax instalment |
3900 |
|
10000 |
Directors’ fees |
15000 |
GST |
9945 |
Employees’ holiday pay |
25000 |
Employees’ wages — |
20000 |
Secretary’s salary — |
3600 |
Managing director’s salary — |
12000 |
Sales commission |
2500 |
Liquidation expenses |
15000 |
Second mortgage on land and buildings |
400000 |
Liquidator’s remuneration |
40000 |
Required
Show the order of priority of payment of debts for Oakland Ltd and calculate the amount payable to the company’s trade accounts payable.
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