Question

Xavier Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $26,300 in free cash. The following debts, totaling $43,550, remain:

Government claims to unpaid taxes$7,100

Salary during last month owed to Mr. Key (not an officer) 18,925

Administrative expenses 3,550

Salary during last month owed to Ms. Rankin (not an officer) 6,325

Unsecured accounts payable 7,650

Indicate how much money will be paid to the creditor associated with Salary during last month owed to Mr. Key and Ms. Rankin.

I do not know how to calculate the maximum salary limit to be paid.

Answer 1

solutions Total free cash $ 26300 preference Administrative expenses 355o $ 22750 and preference Salasses. Mr. Rankin 7650 ( 12u75 Mr. key (Maximum limit peremployee) last Salary during fast month owned to Mr. Key and Ms. Rankin 20125 3rd preference: Government claims to unpaid taxes (22750 -20125) $2625 Administrative expenses Government claims to unpaid taxes Salary during last month owned mr.keyard mass Rankin $3550 & 26a5 120 125