Mandich Co. had the following amounts for its assets, liabilities, and stockholders' equity accounts just before filing a bankruptcy petition and requesting liquidation: Of the salaries payable, $30,000 was owed to an officer of the company. The remaining amount was owed to salaried employees who had not been paid within the previous 80 days: John Webb was owed $10,600, Samantha Jones was owed $15,000, Sandra Johnson was owed $11,900, and Dennis Roberts was owed $2,500. The maximum owed for any one employee's claims for contributions to benefit plans was $800. Estimated expense for administering the liquidation amounted to $40,000.
-What was the total amount of unsecured liabilities with priority?

Question

Mandich Co. had the following amounts for its assets, liabilities, and stockholders' equity accounts just before filing a bankruptcy petition and requesting liquidation:  Of the salaries payable, $30,000 was owed to an officer of the company. The remaining amount was owed to salaried employees who had not been paid within the previous 80 days: John Webb was owed $10,600, Samantha Jones was owed $15,000, Sandra Johnson was owed $11,900, and Dennis Roberts was owed $2,500. The maximum owed for any one employee's claims for contributions to benefit plans was $800. Estimated expense for administering the liquidation amounted to $40,000.
-What was the total amount of unsecured liabilities with priority?

Quizplus · Accepted Answer

The total amount of unsecured liabilities with priority can be calculated as follows:
- Salaries payable to employees who had not been paid within the previous 80 days: $10,600 + $15,000 + $11,900 + $2,500 = $40,000
- Pension contributions: $10,000
- Taxes owed: $80,000
- Estimated expense for administering the liquidation: $40,000
Total unsecured liabilities with priority = $40,000 + $10,000 + $80,000 + $40,000 = $165,000. Therefore, the correct answer is (C) $165,000.