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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
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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