Advanced Accounting 12th Edition by Joe Ben Hoyle,Thomas Schaefer , Timothy Doupnik

Exercise 7

Prior to filing a voluntary Chapter 7 bankruptcy petition, Haynes Company pays a supplier $13,000 to satisfy an unsecured claim. Haynes was insolvent at the time. Subsequently, the trustee appointed to oversee this liquidation forces the return of this $13,000. Which of the following is correct
a. A preference transfer has been voided.
b. All transactions just prior to a voluntary bankruptcy proceeding must be nullified.
c. The supplier should sue for the return of this money.
d. The $ 13,000 claim becomes a liability with priority.