Mandich Co. had the following amounts for its assets, liabilities, and stockholders' equity accounts just before filing a bankruptcy petition and requesting liquidation:

-On a statement of financial affairs, what amount would have been shown as assets available to pay liabilities with priority and unsecured creditors?

Question

Mandich Co. had the following amounts for its assets, liabilities, and stockholders' equity accounts just before filing a bankruptcy petition and requesting liquidation:
 
-On a statement of financial affairs, what amount would have been shown as assets available to pay liabilities with priority and unsecured creditors?

Quizplus · Accepted Answer

To determine the assets available to pay liabilities with priority and unsecured creditors, we need to subtract the secured liabilities ($440,000) from the total assets ($990,000) to get $550,000. Then, we subtract the administrative expenses ($55,000) and the priority claims ($440,000) to get $55,000. Finally, we subtract the $55,000 from the $550,000 to get $495,000 as the assets available to pay the liabilities with priority and unsecured creditors. Therefore, the correct answer is C.