Quincy Corp., about to be liquidated, has the following amounts for its assets and liabilities: The mortgage is secured by the land and building, and the note payable is secured by the equipment. Quincy expects that the expenses of administering the liquidation will total $40,000.
How much should Quincy expect to pay on the accounts payable?

Question

Quincy Corp., about to be liquidated, has the following amounts for its assets and liabilities:  The mortgage is secured by the land and building, and the note payable is secured by the equipment. Quincy expects that the expenses of administering the liquidation will total $40,000.
How much should Quincy expect to pay on the accounts payable?

Quizplus · Accepted Answer

Assets available for priority claims and unsecured creditors $220,000 - priority claims $100,000 = $120,000$120,000/$300,000 unsecured = payment of 40% on unsecured dollars.40% × $240,000 A/P = $96,000