After Payment of All Claims Apart from Payments to Capital

question 16

Multiple Choice

After payment of all claims apart from payments to capital contributors, the liquidator prepares the following statement of shareholders' equity for Hoppers Ltd:
$\begin{array}{llcc} \text { } &\$\\ \text {Ordinary shares fully paid ( 5000000\( ) \) } &2000000 \\ \text { Reserve} &?\\ \text { Accumulated losses } &(1500000) \\ \text { Total} &?\\\end{array}$

What is the total of the reserves if the cash available for distribution after all other claims is $850 000 and the deficit is $550 000?

• A)$900 000
• B)$950 000
• C)$1 350 000
• D)$1 400 000

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Definitions:

Automatic Perfection

A legal concept in secured transactions where a security interest is perfected immediately upon attachment without any further action required by the secured party.

Public Notice

An announcement or advertisement made to the general public typically through newspapers, websites, or public places, regarding important information like legal proceedings, meetings, or property sales.

Secured Creditor

A lender or creditor that has the right to claim specific assets or collateral if the borrower defaults on an agreement.

Repossesses

The action of taking back possession of property, typically by a seller or lender, from the buyer or borrower due to non-compliance with the terms of sale or loan.