A Company That Was to Be Liquidated Had the Following

question 24

Multiple Choice

A company that was to be liquidated had the following liabilities: $$\begin{array} { | l | r | c | } \hline \text { Income Taxes } & \$ 10,000 & \\\hline \text { Notes Payable secured by land } & 100,000 & \\\hline \text { Accounts Payable } & 50,000 & \\\hline \text { Salaries Payable } ( \$ 12,000 \text { from Employee \#1 } & & \\\hline \text { and } \$ 2,000 \text { for Employee } \# 2 ) & 14,000 & \\\hline \text { Administrative expenses for liquidation } & 20,000 & \\\hline & & \\\hline \text { The company had the following assets: } & \text { Book Value } & \text { Fair Value } \\\hline \text { Current Assets } & \$ 100,000 & 95,000 \\\hline \text { Land } & 50,000 & 75,000 \\\hline \text { Building } & 150,000 & 200,000 \\\hline\end{array}$$
-Total liabilities with priority are calculated to be what amount?

• A) $19,000.
• B) $37,950.
• C) $42,950.
• D) $44,000.
• E) $144,000. ($10,950 + $2,000 + $20,000 + $10,000)

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Definitions:

Piaget

Refers to Jean Piaget, a Swiss developmental psychologist best known for his theory of cognitive development in children.

Sensorimotor Stage

The first of the four stages in Piaget's theory of cognitive development, occurring from birth to about two years old, where infants learn about the world through their senses and motor activities.

Wernicke's Aphasia

A neurological disorder characterized by difficulty understanding spoken language and producing coherent speech, typically resulting from damage to Wernicke's area in the brain.

Speech

The expression of or the ability to express thoughts and feelings by articulate sounds.