Question: Flanan Photography Studios Inc FPS is preparing for a court ordered

Flanan Photography Studios, Inc. (FPS) is preparing for a court-ordered bankruptcy and has issued the following preliquidation financial statements.
TruValue Trustees Services (TTS) has been appointed to oversee the sale and disbursement of funds from the liquidation and will charge $450,000 for the service. TTS can obtain $7,250,000 from the sale of FPS’s current assets and $49,850,000 from the sale of fixed assets. Accrued wages represent wages of $4,000 or less per employee, and the wages were earned within 90 days of filing bankruptcy. Unpaid employee benefits represent an amount that was due within the 180-day period preceding the bankruptcy filing. The first and second mortgages are secured by the firm’s total fixed assets. The firm’s stock is currently trading for $3.25 per share.
1. Calculate the amount to be received by each claimant.
2. Calculate and interpret the firm’s Z score.

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  • CreatedMarch 26, 2015
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