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FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Rank the following claims of an organization filing Chapter 7 bankruptcy from 1 to 3 based on the following classifications. Each classification may be used more than once. 1. Secured Claims 2. Unsecured Priority Claims 3. Unsecured Nonpriority Claims A. Claims for wages that are less than $12,475 per individual, earned within 180 days of filing petition for bankruptcy. B. Legal fees incurred after petitioning the court for Chapter 7. C. Claim by the accounting firm for the audit fee from the prior year-end audit completed two months prior to the bankruptcy filing. D. Claims for merchanise that was paid in full but not delivered. E. Claims with a valid lien against assets of the entity. F. Claim by employee for commissions earned in 180 days prior to filing bankruptcy petition, for the portion in excess of $12,475. G. Administrative expenses of the estate, such as trustee fees. H. Claim by a supplier for goods delivered on account. L. Interest on unsecured claims. J. Taxes owed to a government unit.
Transcribed Image Text:Rank the following claims of an organization filing Chapter 7 bankruptcy from 1 to 3 based on the following classifications. Each classification may be used more than once. 1. Secured Claims 2. Unsecured Priority Claims 3. Unsecured Nonpriority Claims A. Claims for wages that are less than $12,475 per individual, earned within 180 days of filing petition for bankruptcy. B. Legal fees incurred after petitioning the court for Chapter 7. C. Claim by the accounting firm for the audit fee from the prior year-end audit completed two months prior to the bankruptcy filing. D. Claims for merchanise that was paid in full but not delivered. E. Claims with a valid lien against assets of the entity. F. Claim by employee for commissions earned in 180 days prior to filing bankruptcy petition, for the portion in excess of $12,475. G. Administrative expenses of the estate, such as trustee fees. H. Claim by a supplier for goods delivered on account. L. Interest on unsecured claims. J. Taxes owed to a government unit.
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