Question

PLEASE DO NOT RE-ANSWER QUESTION I NEED ASSISTANCE ON HOW SOLUTION WAS DETERMINED

* tne holders of the notes payable collect following liquidation? 27. Xavier Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $26,200 in free cash. The following debts, totaling S43,050, remain: Government claims to unpaid taxes $ 7,000 Salary during last month owed to Mr. Key (not an officer). 18,825 Administrative expenses. 3,450 Salary during last month owed to Ms. Rankin (not an officer) 6,225 Unsecured accounts payable. 7,550 Indicate how much money will be paid to the creditor associated with each debt.

WHERE DOES $12,475 COME FROM IN 2ND PRIORITY PAYMENT??

Answer 1

As per the Federal Bankrptancy code in voluntary bankruptancy, for unsecured Claims , for wages , if the wages was earned by an individual within 180days of filing the petition, the claim to be received is upto a maximun $12475 . Thus in the case of Mr key he can receive a claim of maximum $12475