An entity is experiencing financial problems which resulted to its ultimate bankruptcy. The

statement of financial position of the said entity before its liquidation is presented below:

Cash P100,000 Income tax payable P 200,000

Inventory 300,000 Salaries payable 300,000

Land 200,000 Notes payable 800,000

Mortgage payable 100,000

Accounts payable 400,000

Contributed capital 500,000

Deficit (1,700,000)

The following additional data are provided:

The notes payable is secured by the inventory with net realizable value of P250,000.

The mortgage payable is secured by the land with fair market value of P120,000.

1. What is the amount received by the employees at the end of corporate liquidation

concerning their salaries?

a. P100,000

b. P120,000

c. P72,000

d. P300,000