A compulsory winding up in insolvency order was issued by the court in respect of Rock Bottom Ltd. The company had a capital of 65 000 fully paid ordinary shares of $1 each. The liquidator took possession of the companys assets which raised $873 145 on sale. Included in the sale proceeds was $221 000 from the disposal of the land and buildings. The creditors submitted their claims and the following debts were admitted as proven: Liquidation expenses $3 900 Liquidators remuneration 10 400 Mortgage loan secured on land and buildings 130 000 Additional mortgage loan on land and buildings 104 000 Employees wages 5 employees for 2 weeks at $520 per week 5 200 Secretarys salary 3 weeks at $314 per week 942 Employees holiday pay 6 500 Sales commission 650 Managing directors salary 4 weeks at $780 per week 3 120 Directors fees 3 900 Trade creditors 104 000 Unsecured loan stock 130 000 Debentures (secured by circulating security interest) 390 000 PAYG tax instalment 1 014 Fringe benefits tax 2 600 GST 2 586 Required Show the order of priority of payment of debts for Rock Bottom Ltd and calculate the amount payable to the companys ordinary unsecured creditors. (total 30 marks) Q2. a) With relation to associate companies what do you understand to be significant influence and how would you identify it? Include in your answer illustrative examples. (10 marks) b) How are inter-entity transactions dealt with when accounting for associate companies? Give examples. (7 marks) c) How would an investor account for losses made by an associate company?