REFERENCE: Ref.13_02 Mandich Co.had the Following Amounts for Its Assets,liabilities,and Stockholders' Equity

question 43

Multiple Choice

REFERENCE: Ref.13_02
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,$35,000 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.
-On a statement of financial affairs,what amount would have been shown as free assets available to pay liabilities with priority and unsecured creditors?

• A)$390,000.
• B)$445,000.
• C)$495,000.
• D)$660,000.
• E)$795,000.

---

Definitions:

Cash Discount Rate

A reduction on the invoice price offered by sellers to encourage prompt payment from the buyer.

Invoice

A detailed bill provided by a seller to a buyer, listing the products or services sold and the total amount due.

Outstanding Invoices

Unpaid invoices that represent the amount due from buyers to sellers, not yet collected.

Terms

Conditions and stipulations under which agreements are made, including those governing loans, contracts, and sales.