Question

Xavier Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $27,200 in free cash. The following debts, totaling $48,050, remain: Government claims to unpaid taxes $ 8,000 Salary during last month Owed to Mr. Key (not an officer) 19,825 Administrative expenses 4,450 Salary during last month Owed to Ms. Rankin (not an officer) 7,225 Unsecured accounts payable Indicate how much money will be paid to the creditor associated with each debt. Amounts Types of Debts Administrative expenses Salary during last month owed to Mr. Key and Ms. Rankin Government claims to unpaid taxes Next >

Answer 1

Money that will be paid to the Creditor associated with each debt:

Particulars	Amount
Administrative Expenses	$4,450
Salary during the last month owed to Mr. Key & Ms. Rankin	$19,700
Government claims to unpaid taxes	$3,050

Explanation:

Total of Free assets = $27,200

Ist Priority: Administrative Expense = $4,450

IInd Priority: Wages - $7,225 for Rankin & Rs 12,475 with an maximum amount = $19,700

Total priority Claims = $24,150

Now, all money will be given for Government Claims for unpaid taxes = $3,050