QUESTION 14 Zachary Ltd went into liquidation on 1 July 2021 and presented the following statement of financial position. 1 6,025,000 Zachary Ltd Statement of Financial Position as at 30 June 2021 (Extract) $ $ Assets Current assets Accounts receivable 4,800,000 Inventory 1,225,000 Non-current assets Land and buildings 5,120,000 Furniture and fittings 2,400,000 Less: Accumulated depreciation 420,000 1,980,000 Total assets Liabilities Current liabilities Accrued expenses 75,200 Overdraft 57,000 Trade creditors 985,000 Non-current liabilities Debentures Total liabilities Net assets 7,100,000 13,125,000 1,117,200 1,000,000 2,117,200 11,007,800 Additional information: (a) Proceeds from the sale of assets and collections: Accounts receivable Inventory Land and buildings Furniture and fittings Calls in arrears $ 3,900,000 567,000 5,400,000 875,000 11,500 (b) Payments approved by the Liquidator in addition those detailed above: $ Accrued expenses 73,000 Director's salary 28,000 Employee retrenchment payments 265,000 Interest on overdraft 11,265 Interest on debentures 120,000 Liquidator's expenses and fees 480,000 Trade creditors 1,236,000 Note: Overdraft is a secured interest in circulating asset - inventory Debentures have a secured interest over land and buildings The interest incurred and proved or accepted by the liquidator on secured finance facilities have the same priority as the finance facility. Required: Show the ranking of creditor's claims in strict order of preference in accordance with the Corporations Act 2001. Include calculations of to whom and how much the liquidator will pay. QUESTION 14 Zachary Ltd went into liquidation on 1 July 2021 and presented the following statement of financial position. 1 6,025,000 Zachary Ltd Statement of Financial Position as at 30 June 2021 (Extract) $ $ Assets Current assets Accounts receivable 4,800,000 Inventory 1,225,000 Non-current assets Land and buildings 5,120,000 Furniture and fittings 2,400,000 Less: Accumulated depreciation 420,000 1,980,000 Total assets Liabilities Current liabilities Accrued expenses 75,200 Overdraft 57,000 Trade creditors 985,000 Non-current liabilities Debentures Total liabilities Net assets 7,100,000 13,125,000 1,117,200 1,000,000 2,117,200 11,007,800 Additional information: (a) Proceeds from the sale of assets and collections: Accounts receivable Inventory Land and buildings Furniture and fittings Calls in arrears $ 3,900,000 567,000 5,400,000 875,000 11,500 (b) Payments approved by the Liquidator in addition those detailed above: $ Accrued expenses 73,000 Director's salary 28,000 Employee retrenchment payments 265,000 Interest on overdraft 11,265 Interest on debentures 120,000 Liquidator's expenses and fees 480,000 Trade creditors 1,236,000 Note: Overdraft is a secured interest in circulating asset - inventory Debentures have a secured interest over land and buildings The interest incurred and proved or accepted by the liquidator on secured finance facilities have the same priority as the finance facility. Required: Show the ranking of creditor's claims in strict order of preference in accordance with the Corporations Act 2001. Include calculations of to whom and how much the liquidator will pay
