14. Master Ltd, whose capital consisted of $500,000 in fully paid shares, was woundup as a result of court order s liquidator realised $891,950 from the sale ofthe company's assets. This amount included $250,000 from the proceeds onsale of the company's land and buildings. Debts proved and admitted were:Unsecured notes$150,000Debentures (secured by circulating securityinterest)First mortgage on land and buildingsTrade accounts payablePAYG tax instalmentFringe benefits tax350,000200,00078,0008603,0003,9893,000GSTEmployees' holiday payEmployees' wages-$400 per weekSecretary's salary-3 weeks at $550 per weekManaging director's salary-4 weeks at $900 perweek5 empleyees for 2 weeks at4,00016503,6004,000Sales commissionLiquidation expensesSecond mortgage on land and buildingsLiquidator's remuneration80,00090,0006,000Instructions:Show the order of priority of payment of debts for Master Ltd and calculate the amount payableto the company's trade accounts payable.

Accounts payable can be defined as the permanent account under the current liabilities of the…

Answered: Instructions: Show the order of…

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

Problem 1Q

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Question

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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