Q2. A liquidator was appointed after Rock Bottom Pty Ltd was declared insolvent on 1 July 2018. The companys assets realised $14,250,000. This came from the sale of the secured land and buildings for $7,500,000 and other assets which were sold for $6,750,000.

The creditors totalled $16,350,000, and were made up of the following amounts:

Secured creditor $9,000,000, receivers costs when realising secured asset $150,000, liquidators expenses $600,000, unsecured trade payables $2,400,000, tax payable $1,050,000, local government rates $300,000, staff wages payable $900,000, executive directors wages payable (5 directors) $450,000, staff leave entitlements $150,000, executive directors leave entitlements (5 directors) $150,000, unsecured bank overdraft $750,000, and dividends payable $450,000.

REQUIRED

You are required to rank the above creditors and then to calculate how much each creditor would be paid.

(16 marks)