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    Running Head: LIQUIDATION

    Uploaded by

    Carlos Alphonce
    1) The company liquidated assets for $3.5 million, paid off the first mortgage and fees/expenses, leaving $3.27 million available for creditors. 2) General creditors had $1.875 million in total claims that received a 100% distribution from the available funds. 3) After paying creditors, $1.395 million remained for common stockholders, which was 74.44% of the original equity amount.

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    Running Head: LIQUIDATION

    Uploaded by

    Carlos Alphonce
    17 views3 pages
    1) The company liquidated assets for $3.5 million, paid off the first mortgage and fees/expenses, leaving $3.27 million available for creditors. 2) General creditors had $1.875 million in total claims that received a 100% distribution from the available funds. 3) After paying creditors, $1.395 million remained for common stockholders, which was 74.44% of the original equity amount.

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    1) The company liquidated assets for $3.5 million, paid off the first mortgage and fees/expenses, leaving $3.27 million available for creditors. 2) General creditors had $1.875 million in total claims that received a 100% distribution from the available funds. 3) After paying creditors, $1.395 million remained for common stockholders, which was 74.44% of the original equity amount.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    17 views3 pages

    Running Head: LIQUIDATION

    Uploaded by

    Carlos Alphonce
    1) The company liquidated assets for $3.5 million, paid off the first mortgage and fees/expenses, leaving $3.27 million available for creditors. 2) General creditors had $1.875 million in total claims that received a 100% distribution from the available funds. 3) After paying creditors, $1.395 million remained for common stockholders, which was 74.44% of the original equity amount.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    Running head: LIQUIDATION

    Liquidation

    Name

    Institution
    LIQUIDATION

    Distribution of proceeds on liquidation

     Proceeds from sale 3500000


    of assets
    First mortgage, paid 0
    from sale of assets
    Fees and expenses of 229250
    administration of
    bankruptcy
     Wages due workers 0
    earned within 3
    months 
    prior to filing of
    bankruptcy petition
     Taxes 0
    Unfunded pension 0
    liabilities
    Available to general 3270750
    creditors

    Distribution to general creditors:

    Claims of Claim  Application After Percentage


    General (1) of 100% Subordination of
    Creditors $ Distribution Adjustment Original
    (2) $ (3) $ Claims
    Received
    (4) %
    Notes 750000 750000 750000 100%
    payable
    Accounts 375000 375000 375000 100%
    payable
    Subordinate 750000 750000 750000 100%
    d debentures
    Total 187500 187500 187500
    LIQUIDATION

    Remaining cash = 3270750 - 1875000 = 1395750

    $1395750 will go to the common stockholders.


    They will recieve only 74.44% (1395750/1875000*100) of the amount of equity in Balance
    sheet.

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