ACT305 CORPORATE ACCOUNTING
A compulsory winding up in insolvency order was issued by the court in respect of Rock Bottom Ltd. The company had a capital of 65 000 fully paid ordinary shares of $1 each. The liquidator took possession of the company’s assets which raised $873 145 on sale. Included in the sale proceeds was $221 000 from the disposal of the land and buildings.
The creditors submitted their claims and the following debts were admitted as proven:
|Liquidation expenses||$3 900|
|Liquidator’s remuneration||10 400|
|Mortgage loan secured on land and buildings||130 000|
|Additional mortgage loan on land and buildings||104 000|
|Employees’ wages 5 employees for 2 weeks at $520 per week||5 200|
|Secretary’s salary — 3 weeks at $314 per week||942|
|Employees’ holiday pay||6 500|
|Managing director’s salary — 4 weeks at $780 per week||3 120|
|Directors’ fees||3 900|
|Trade creditors||104 000|
|Unsecured loan stock||130 000|
|Debentures (secured by circulating security interest)||390 000|
|PAYG tax instalment||1 014|
|Fringe benefits tax||2 600|
Show the order of priority of payment of debts for Rock Bottom Ltd and calculate the amount payable to the company’s ordinary unsecured creditors.
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