Margaret has $3,200 cash after selling off her television, stereo, and personal computer.She has debts of $4,800 owing to the following creditors: Anna - $900
Bob's Shop - $1500
Hyatt's - $2100
Jones - $300
If they all agree to a composition agreement, how much will Hyatt's be able to collect?

Question

Quizplus · Accepted Answer

A composition agreement is when all the creditors agree to accept a partial payment of what they are owed. In this case, the total owed is $4,800 and Margaret has $3,200, so the creditors would have to agree to accept less than the full amount. If they all agree to split the $3,200 proportionally, Hyatt's would receive 2100/4800 * 3200 = $1,400. Therefore, the correct answer is B.

Margaret Has $3,200 Cash After Selling Off Her Television, Stereo