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Mandich Co. had the following amounts for its assets, liabilities, and stockholders’ equity accounts just before filing a bankruptcy petition and requesting liquidation: 
Net
Book Relizable
Value Value 
Cash $10,000 10,000
Accounts receivable 100,000 60,000
Inventory 350,000 350,000
Land 110,000 80,000
Building & Equipment 700,000 380,000
Accounts payable 100,000
Salaries payable 60,000
Notes payable (secured by inventory) 300,000
Employee’s claims for contributions to benefit plans 18,000
Taxes payable 80,000
Liability for accrued expenses 20,000
Bonds payable 500,000
Common stock 200,000
Additional pain-in capital 100,000
Retained earnings (deficit) (108,000)

Net Book Realizable Value Value Cash $ 10,000 $ 10,000 Accounts receivable 100,000 60,000 Inventory 350,000 350,000 Land 110,000 80,000 Building & Equipment 700,000 380,000 Accounts payable 100,000 Salaries payable 60,000 Notes payable (secured by inventory) 300,000 Employees’ claims for contributions to benefit plans 18,000 Taxes payable 80,000 Liability for accrued expenses 20,000 Bonds payable 500,000 Common stock 200,000 Additional paid-in capital 100,000 Retained earnings (deficit) ( 108,000) 
Of the salaries payable, 70% was owed to officers of the company. The remaining amount was owed to wage employees who had not been paid within the previous 80 days. John Webb was owed $4,500. Samantha Jones was owed $5,000. XXXXX XXXXX was owed $3,600. XXXXX XXXXX was owed $4,000. George Rothman was owed $900. The maximum owed for any one employee’s claims for contributions to benefit plans was $800. Estimated expense for administering the liquidation amounted to $40,000. 

On a statement of financial affairs, what amount would have been shown as free assets available to pay liabilities with priority and unsecured creditors? 
A) $397,000. 
B) $880,000. 
C) $530,000. 
D) $580,000. 
E) $597,000. 

What amount would the company would have been expected to pay for every dollar of unsecured liability without priority? 
A) $.6015. 
B) $.6213. 
C) $.6810. 
D) $.6479. 
E) $.8163.