Balance Sheet, Failures Galore, Inc.* Assets Current assets Fixed assets, net $ 9,800,000 10,700,000 Liabilities and Equity Accounts payable Bank notes payable Accrued wages Accrued taxes Mortgage bonds Debentures Subordinated debentures 2. Wages owed to employees 3. Taxes owed to governments $ Preferred stock Common equity Liabilities and equity $ 3,000,000 3,000,000 200,000 300,000 3,000,000 3,000,000 3,000,000 Total assets $ 20,500,000 *The subordinated debentures are subordinate to the bank notes payable. Assume that all the accrued wages can be paid out of the liquidation proceeds. =40% 2,500,000 2,500,000 20,500,000 Distribution of the Proceeds from the Liquidation of Failures Galore, Inc. Total liquidation proceeds 1. Bankruptcy administration expenses $8,390,000 $450,000 200,000 300,000 Total priority claims $950,000 Funds available for claims of creditors $7,440,000 4. Payment to mortgage bondholders (proceeds from sale of secured assets) 2,400,000 Funds available for claims of general and unsecured creditors $5,040,000 Settlement percentage for general and unsecured creditors- Funds available for general and unsecured creditors Total claims of general and unsecured creditors 5,040,000 12,600,000 Accounts payable Bank notes payable Mortgage bonds Debentures Subordinated debentures Total Claim Accounts payable Bank notes payable $3,000,000 3,000,000 600,000 3,000,000 3,000,000 $12,600,000 Funds available for preferred and common stockholders Settlement, 40% of Claim (Before Subordination Mortgage bonds Debentures Subordinated debentures Adjustment) $1,200,000 1,200,000 240,000 1,200,000 1,200,000 $5,040,000 Accounts payable Bank notes payable Mortgage bonds Debentures Subordinated debentures. $ $ $ a. If total liquidation proceeds are $7.13 million, what is the distribution of these proceeds among the various creditors of Failures Galore? Round your answers to the nearest dollar. Settlement, (After Subordination Adjustment) $ $ $0 $ $ $ $ Settlement, 40% of Claim (After Subordination Adjustment) $1,200,000 2,400,000 240,000 1,200,000 Funds available for preferred and common stockholders: $ b. If total liquidation proceeds are $9.65 million, what is the distribution of these proceeds among the various creditors of Failures Galore? Round your answers to the nearest dollar. Settlement, (After Subordination Adjustment) $ Funds available for preferred and common stockholders: $ 0 $5,040,000